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The new view of growth and business cycles

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  • Jonas D. M. Fisher

Abstract

Evidence on the cost of business equipment investment supports a new way of understanding growth and business cycles. The equipment price has been falling for most of the last 40 years and it tends to fall more the faster economy is growing. This suggests that technological change embodied in new capital equipment has a substantial effect on growth and business cycles.

Suggested Citation

  • Jonas D. M. Fisher, 1999. "The new view of growth and business cycles," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 23(Q I), pages 35-56.
    • Handle: RePEc:fip:fedhep:y:1999:i:qi:p:35-56:n:v.23no.1
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    References listed on IDEAS

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    1. Christiano, Lawrence J. & G. Harrison, Sharon, 1999. "Chaos, sunspots and automatic stabilizers," Journal of Monetary Economics, Elsevier, vol. 44(1), pages 3-31, August.
    2. Robert J. Barro & Paul Romer, 1993. "Economic Growth (1992)," NBER Books, National Bureau of Economic Research, Inc, number barr93-1, October.
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    Cited by:

    1. Jesus Fernandez-Villaverde & Juan F. Rubio-Ramirez, 2007. "On the solution of the growth model with investment-specific technological change," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 549-553.
    2. Cho, Daeha & Kim, Kwang Hwan, 2022. "Inefficient relative price fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 137(C).
    3. Beaudry, Paul & Moura, Alban & Portier, Franck, 2015. "Reexamining the cyclical behavior of the relative price of investment," Economics Letters, Elsevier, vol. 135(C), pages 108-111.
    4. Thomet, Jacqueline & Wegmueller, Philipp, 2021. "Technology Shocks And Hours Worked: A Cross-Country Analysis," Macroeconomic Dynamics, Cambridge University Press, vol. 25(4), pages 1020-1052, June.
    5. Millan L. B. Mulraine, 2005. "Investment-Specific Technology Shocks in a Small Open Economy," Macroeconomics 0506009, University Library of Munich, Germany.
    6. Jonas D. M. Fisher, 2002. "Technology shocks matter," Working Paper Series WP-02-14, Federal Reserve Bank of Chicago.
    7. Mulraine, Millan L. B., 2006. "Real Exchange Rate Dynamics With Endogenous Distribution Costs," MPRA Paper 9, University Library of Munich, Germany.
    8. Alban Moura, 2020. "Total factor productivity and the measurement of neutral technology," BCL working papers 143, Central Bank of Luxembourg.
    9. Moura, Alban, 2021. "Are neutral and investment-specific technology shocks correlated?," European Economic Review, Elsevier, vol. 139(C).
    10. Reinout De Bock, 2005. "Embodied Technical Change and the Persistence of Vacancies," 2005 Meeting Papers 572, Society for Economic Dynamics.

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    Keywords

    Business cycles;

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