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The effects of technological innovations on employment : a new explanation

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Author Info
Chahnez Boudaya () (EUREQua and CIRPEE)

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Abstract

This paper investigates principally the effects of a technological innovation on hours worked in a sticky price model. Our challenge is to reproduce the short-run decline in employment supported by a large range of recent works, inspired by Gali (1999), regardless of any monetary policy consideration. The model simulations concern the post war U.S. economy under two different monetary policies : an exogenous rule targeting money supply and a simple Taylor rule. The most interesting result is that the introduction of an input-output production structure counterbalances the full-accommodation of a technological innovation when monetary policy is governed by a Taylor rule, by (i) providing the model with more price rigidities ; (ii) inducing a substitution effect between intermediate goods and labor input for plausible values of intermediate inputs share.

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Publisher Info
Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v05013.

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Length: 44 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:mse:wpsorb:v05013

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Related research
Keywords: Technology shocks; sticky prices; labor; intermediate inputs; Taylor rule; exogenous monetary policy.;

Find related papers by JEL classification:
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chahnez Boudaya, 2006. "Stage-specific technology shocks and employment : Could we reconcile with the RBC models ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00115791_v1, HAL. [Downloadable!]
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