Propagation through endogenous investment-specific technological change
Many real business cycle models lack a significant propagation mechanism. Consequently most of the serial correlation in output is inherited from the serial correlation in the exogenous shocks. A simple model is presented to show there need not be any relationship between the serial correlation of the exogenous shocks, and that of output. This is accomplished by incorporating the well-documented fact that research spending has generated changes in the real price of capital.
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- Greenwood, J. & Hercowitz, Z. & Krusell, P., 1995.
"Long-Run Implications of Investment-Specific Technological Change,"
UWO Department of Economics Working Papers
9510, University of Western Ontario, Department of Economics.
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- Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
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"The role of investment-specific technological change in the business cycle,"
European Economic Review,
Elsevier, vol. 44(1), pages 91-115, January.
- Greenwood, J. & Hercowitz, Z. & Krusell, P., 1998. "The Role of Investment-Specific Technological Change in the Business Cycle," RCER Working Papers 449, University of Rochester - Center for Economic Research (RCER).
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"Output Dynamics in Real-Business-Cycle Models,"
American Economic Review,
American Economic Association, vol. 85(3), pages 492-511, June.
- Perli, Roberto & Sakellaris, Plutarchos, 1998. "Human capital formation and business cycle persistence," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 67-92, June.
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