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Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?

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  • Galí, Jordi
  • Rabanal, Pau

Abstract

Our answer: not so well. We reach that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive co-movement between output and labor input measures.

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  • 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.
  • Handle: RePEc:cpr:ceprdp:4522
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    Keywords

    nominal rigidities; real business cycles; real frictions; technology shocks;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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