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Hours Worked and Permanent Technology Shocks in Open Economies

  • Martial Dupaigne

    ()

  • Patrick Fève

    ()

We use Structural Vector Autoregressions to study the impact of technology improvements on hours worked in the major seven countries. While previous studies estimate the response of labor input to permanent shocks to country -level labor productivity, we consider the response of labor input to aggregate -level labor productivity. Since labor productivities do cointegrate in the G7, the estimated responses should look very similar. They do not: for each country but Germany, the responses estimated using G7 labor productivity sizeably exceed those estimated using country -level labor productivity. These results also hold in larger SVAR models.

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File URL: http://hdl.handle.net/10.1007/s11079-009-9159-z
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 21 (2010)
Issue (Month): 1 (February)
Pages: 69-86

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Handle: RePEc:kap:openec:v:21:y:2010:i:1:p:69-86
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  1. Fabio Canova & Matteo Ciccarelli & Eva Ortega, 2004. "Similarities and convergence in G-7 cycles," Banco de Espa�a Working Papers 0404, Banco de Espa�a.
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  8. Dupaigne, Martial & Fève, Patrick, 2005. "Technology Shocks around the World," IDEI Working Papers 346, Institut d'Économie Industrielle (IDEI), Toulouse.
  9. Ayhan Kose, M. & Otrok, Christopher & Whiteman, Charles H., 2008. "Understanding the evolution of world business cycles," Journal of International Economics, Elsevier, vol. 75(1), pages 110-130, May.
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  15. Martial Dupaigne & Patrick Feve, 2008. "Online Appendix to "Technology shocks around the world"," Technical Appendices 08-23, Review of Economic Dynamics.
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