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Read All about It!! What Happens Following a Technology Shock?

  • Michelle Alexopoulos

Existing indicators of technical change are plagued by shortcomings. I present new measures based on books published in the field of technology that resolve many of these problems and use them to identify the impact of technology shocks on economic activity. They are positively linked to changes in R&D and scientific knowledge, and capture the new technologies' commercialization dates. Changes in information technology are found to be important sources of economic fluctuations in the post-WWII period, and total factor productivity, investment, and, to a lesser extent, labor are all shown to increase following a positive technology shock. (JEL E22, E23, E32, O33, O34, O47 )

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 101 (2011)
Issue (Month): 4 (June)
Pages: 1144-79

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Handle: RePEc:aea:aecrev:v:101:y:2011:i:4:p:1144-79
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  1. Susanto Basu & John G. Fernald & Miles S. Kimball, 2004. "Are technology improvements contractionary?," Working Paper Series WP-04-20, Federal Reserve Bank of Chicago.
  2. Michelle Alexopoulos & Jon Cohen, 2010. "Volumes of Evidence - Examining Technical Change Last Century Through a New Lens," Working Papers tecipa-392, University of Toronto, Department of Economics.
  3. Patrick Francois & Huw Lloyd-Ellis, 2006. "Intrinsic Business Cycles with Pro-Cyclical R&D," Working Papers 1102, Queen's University, Department of Economics.
  4. Daniel Wilson, 2004. "IT and Beyond: The Contribution of Heterogenous Capital to Productivity," Working Papers 04-20, Center for Economic Studies, U.S. Census Bureau.
  5. Paul Beaudry & Franck Portier, 2004. "Stock Prices, News and Economic Fluctuations," NBER Working Papers 10548, National Bureau of Economic Research, Inc.
  6. Galí, Jordi & Rabanal, Pau, 2004. "Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?," CEPR Discussion Papers 4522, C.E.P.R. Discussion Papers.
  7. Galí, Jordi & Gambetti, Luca, 2008. "On the Sources of the Great Moderation," CEPR Discussion Papers 6632, C.E.P.R. Discussion Papers.
  8. Lone Engbo Christiansen, 2008. "Do Technology Shocks Lead to Productivity Slowdowns? Evidence from Patent Data," IMF Working Papers 08/24, International Monetary Fund.
  9. Jordi Gali & Pau Rabanal, 2004. "Technology Shocks and Aggregate Fluctuations: How Well Does the RBS Model Fit Postwar U.S. Data?," NBER Working Papers 10636, National Bureau of Economic Research, Inc.
  10. Victor Zarnowitz, 1992. "Business Cycles: Theory, History, Indicators, and Forecasting," NBER Books, National Bureau of Economic Research, Inc, number zarn92-1, December.
  11. Ross, D. R. & Zimmermann, K. F., 1995. "Evaluating reported determinants of labour demand," Labour Economics, Elsevier, vol. 2(1), pages 102-102, March.
  12. Yorukoglu, Mehmet, 2000. "Product vs. process innovations and economic fluctuations," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 137-163, June.
  13. Lawrence J. Christiano & Martin Eichenbaum & Robert Vigfusson, 2003. "What Happens After a Technology Shock?," NBER Working Papers 9819, National Bureau of Economic Research, Inc.
  14. John Shea, 1998. "What Do Technology Shocks Do?," NBER Working Papers 6632, National Bureau of Economic Research, Inc.
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