IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Sectoral and aggregate technology shocks: Is there a relationship?

Listed author(s):
  • Werner Hölzl

    ()

    (Vienna University of Economics & B.A.)

  • Andreas Reinstaller

    ()

    (Vienna University of Economics & B.A. and MERIT - Maastricht University)

We analyze sector specific shocks in productivity and demand in 19 manufacturing sectors of the Austrian economy. Based on a structural vector autoregressive (SVAR) model with long run restrictions developed by Gali's (1999) we extract technology and non-technology shocks from sectoral andaggregate data and study their patterns and relationship by means of a principal components analysis. We find a close association of sectoral and macroeconomic non-technology shocks but only a very weak association for technology shocks. Impulse-response analysis indicates that for almost all manufacturing sectors and the Austrian economy productivity growth rates experience an immediate increase to positive technology shocks while the hours worked decline. We therefore confirm Gali's results on the level of manufacturing industries. Finally, we use the identified shocks as explanatory variables in fixed effect regressions on growth rates of employment, output and investment. We find that our shocks are closely associated to employment growth and output growth but not to growth in investment. The effect of technology shocks is different on the level of manufacturing industries and the aggregate economy. (A substaintially revised version of this paper is published in Empirica vol. 32 pp. 45-72)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.wu-wien.ac.at/inst/vw1/gee/papers/geewp38.pdf
Download Restriction: no

Paper provided by Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp38.

as
in new window

Length:
Date of creation: Jun 2004
Handle: RePEc:wiw:wiwgee:geewp38
Note: PDF Document
Contact details of provider: Postal:
Welthandelsplatz 1, 1020 Vienna, Austria

Web page: http://www.wu.ac.at/economics/en

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Lawrence J. Christiano & Martin Eichenbaum & Robert J. Vigfusson, 2003. "The response of hours to a technology shock: evidence based on direct measures of technology," International Finance Discussion Papers 790, Board of Governors of the Federal Reserve System (U.S.).
  2. Susanto Basu & John G. Fernald & Miles S. Kimball, 1998. "Are technology improvements contractionary?," International Finance Discussion Papers 625, Board of Governors of the Federal Reserve System (U.S.).
  3. Zvi Griliches, 1996. "The Discovery of the Residual: A Historical Note," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1324-1330, September.
  4. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2-3), pages 208-262, 05.
  5. Charles L. Evans, 1991. "Productivity shocks and real business cycles," Working Paper Series, Macroeconomic Issues 91-22, Federal Reserve Bank of Chicago.
  6. Marvin Goodfriend & Robert G. King, 1998. "The new neoclassical synthesis and the role of monetary policy," Working Paper 98-05, Federal Reserve Bank of Richmond.
  7. Neville Francis & Valerie A. Ramey, 2002. "Is the Technology-Driven Real Business Cycle Hypothesis Dead?," NBER Working Papers 8726, National Bureau of Economic Research, Inc.
  8. Michael Peneder, 2004. "Tracing Empirical Trails of Schumpeterian Development," Papers on Economics and Evolution 2004-09, Philipps University Marburg, Department of Geography.
  9. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
  10. Robert J. Barro, 1998. "Notes on Growth Accounting," NBER Working Papers 6654, National Bureau of Economic Research, Inc.
  11. George W. Stadler, 1994. "Real Business Cycles," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1750-1783, December.
  12. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
  13. Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
  14. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
  15. Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995. "Sectoral Solow Residuals," NBER Working Papers 5286, National Bureau of Economic Research, Inc.
  16. John Shea, 1998. "What Do Technology Shocks Do?," NBER Working Papers 6632, National Bureau of Economic Research, Inc.
  17. Harald Uhlig, 2004. "Do Technology Shocks Lead to a Fall in Total Hours Worked?," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 361-371, 04/05.
  18. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
  19. Pasinetti,Luigi, 1993. "Structural Economic Dynamics," Cambridge Books, Cambridge University Press, number 9780521432825, October.
  20. Long, John B, Jr & Plosser, Charles I, 1987. "Sectoral vs. Aggregate Shocks in the Business Cycle," American Economic Review, American Economic Association, vol. 77(2), pages 333-336, May.
  21. Harberger, Arnold C, 1998. "A Vision of the Growth Process," American Economic Review, American Economic Association, vol. 88(1), pages 1-32, March.
  22. Kenneth I. Carlaw & Richard G. Lipsey, 2003. "Productivity, Technology and Economic Growth: What is the Relationship?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 457-495, 07.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wiw:wiwgee:geewp38. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.