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On the Employment Effect of Technology: Evidence from US Manufacturing for 1958-1996

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  • Yongsung Chang

    (Federal Reserve Bank of Richmond)

  • Jay H. Hong

    (University of Pennsylvania)

Abstract

Recently, Gali and others find that technological progress may be contractionary: a favorable technology shock reduces hours worked in the short run. We ask whether this observation is robust in disaggregate data. According to our VAR analysis of 458 four-digit U.S. manufacturing industries for 1958-1996, some industries do exhibit temporary reduction in hours in response to a permanent increase in TFP. However, there are far more industries in which technological progress significantly increases hours. Using micro data on average price duration, we ask whether the difference across industries is related to the stickiness of industry-output prices. Among 87 manufacturing goods, we do not find such a relation.

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Bibliographic Info

Paper provided by EconWPA in its series Macroeconomics with number 0307004.

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Date of creation: 08 Jul 2003
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Handle: RePEc:wpa:wuwpma:0307004

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Web page: http://128.118.178.162

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Keywords: Technology Shocks; Hours Fluctuations; Sticky Prices;

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  1. Susanto Basu & John Fernald & Miles Kimball, 1998. "Are technology improvements contractionary?," International Finance Discussion Papers 625, Board of Governors of the Federal Reserve System (U.S.).
  2. Galí, Jordi, 1996. "Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?," CEPR Discussion Papers 1499, C.E.P.R. Discussion Papers.
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  8. Hall, Robert E., 1987. "Productivity and the business cycle," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 27(1), pages 421-444, January.
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  10. Kortum, Samuel, 1993. "Equilibrium R&D and the Patent-R&D Ratio: U.S. Evidence," American Economic Review, American Economic Association, vol. 83(2), pages 450-57, May.
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  12. Zvi Griliches, 1998. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 213-240 National Bureau of Economic Research, Inc.
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  16. Domenico J. Marchetti & francesco Nucci, 2001. "Unobserved Factor Utilization, Technology Shocks and Business Cycles," Temi di discussione (Economic working papers) 392, Bank of Italy, Economic Research and International Relations Area.
  17. Michael Dotsey, 1999. "Structure from shocks," Working Paper 99-06, Federal Reserve Bank of Richmond.
  18. Unknown, 1998. "Discussion," Journal of Economic Psychology, Elsevier, vol. 19(5), pages 645-650, October.
  19. Mark Bils & Peter J. Klenow, 2004. "Some Evidence on the Importance of Sticky Prices," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 947-985, October.
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Cited by:
  1. Thomas Philippon & Francesco Franco, 2005. "Firms and Aggregate Dynamics," 2005 Meeting Papers 246, Society for Economic Dynamics.
  2. Giancarlo Corsetti & Luca Dedola & Sylvain Leduc, 2006. "Productivity, external balance and exchange rates: evidence on the transmission mechanism among G7 countries," Economics Working Papers ECO2006/39, European University Institute.
  3. repec:hal:cesptp:halshs-00115791 is not listed on IDEAS

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