Werner Hölzl () (Vienna University of Economics & B.A.) Andreas Reinstaller () (Vienna University of Economics & B.A. and MERIT - Maastricht University)
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We analyze sector specific shocks in productivity and demand in 19 manufacturing sectors of the Austrian economy. Based on a structural vector autoregressive (SVAR) model with long run restrictions developed by Gali's (1999) we extract technology and non-technology shocks from sectoral andaggregate data and study their patterns and relationship by means of a principal components analysis. We find a close association of sectoral and macroeconomic non-technology shocks but only a very weak association for technology shocks. Impulse-response analysis indicates that for almost all manufacturing sectors and the Austrian economy productivity growth rates experience an immediate increase to positive technology shocks while the hours worked decline. We therefore confirm Gali's results on the level of manufacturing industries. Finally, we use the identified shocks as explanatory variables in fixed effect regressions on growth rates of employment, output and investment. We find that our shocks are closely associated to employment growth and output growth but not to growth in investment. The effect of technology shocks is different on the level of manufacturing industries and the aggregate economy. (A substaintially revised version of this paper is published in Empirica vol. 32 pp. 45-72)
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Paper provided by Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number
geewp38.
Find related papers by JEL classification: D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data) O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
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Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995.
"Sectoral Solow Residuals,"
NBER Working Papers
5286, National Bureau of Economic Research, Inc.
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