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On the robust effects of technology shocks on hours worked and output

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  • Fabio Canova
  • David López-Salido
  • Claudio Michelacci

Abstract

We analyze the effects of neutral and investment-specific technology shocks on hours and output. Long cycles in hours are captured in a variety of ways. Hours robustly fall in response to neutral shocks and robustly increase in response to investment specific shocks. The percentage of the variance of hours (output) explained by neutral shocks is small (large); the opposite is true for investment specific shocks. ‘News shocks’ are uncorrelated with the estimated technology shocks.

Suggested Citation

  • Fabio Canova & David López-Salido & Claudio Michelacci, 2006. "On the robust effects of technology shocks on hours worked and output," Economics Working Papers 1013, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 2008.
    • Handle: RePEc:upf:upfgen:1013
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    Cited by:

    1. Justiniano, Alejandro & Primiceri, Giorgio E. & Tambalotti, Andrea, 2010. "Investment shocks and business cycles," Journal of Monetary Economics, Elsevier, vol. 57(2), pages 132-145, March.
    2. Canova, Fabio & Michelacci, Claudio & López-Salido, J David, 2007. "The Labour Market Effects of Technology Shocks," CEPR Discussion Papers 6365, C.E.P.R. Discussion Papers.
    3. Fabio Canova & David Lopez-Salido & Claudio Michelacci, 2009. "The ins and outs of unemployment: An analysis conditional on technology shocks," Economics Working Papers 1213, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2012.
    4. Zeno Enders & Almut Balleer, 2012. "Expansionary and Contractionary Technology Shocks," 2012 Meeting Papers 812, Society for Economic Dynamics.
    5. Balleer, Almut & Enders, Zeno, 2013. "Expansionary and Contractionary Technology Improvements," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80046, Verein für Socialpolitik / German Economic Association.
    6. Fabio Canova & David Lopez-Salido & Claudio Michelacci, 2006. "Schumpeterian technology shocks," Economics Working Papers 1012, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2007.

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    More about this item

    Keywords

    Technology disturbances; structural VARs; low frequency movements; news shocks;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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