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The Dynamic E ff ects of Neutral and Investment-Speci fi c Technology Shocks
| Content Provider | Semantic Scholar |
|---|---|
| Author | Fisher, Jonas D. M. |
| Copyright Year | 2005 |
| Abstract | The neoclassical growth model is used to identify the short run effects of two technology shocks. Neutral shocks affect the production of all goods homogeneously, and investment-specific shocks affect only investment goods. The paper finds that previous estimates, based on considering only neutral technical change, substantially understate the effects of technology shocks. When investment-specific technical change is taken into account, the two technology shocks combined account for 40-60% of the fluctuations in output and hours at business cycle frequencies. The two shocks also account for more than 50% of the forecast error of output and hours over an eight year horizon. The investment-specific shocks account for the majority of these short run effects. ∗This paper is a substantial revision to “Technology Shocks Matter.” Thanks to Lisa Barrow, Lawrence Christiano, Martin Eichenbaum, Charles Evans, John Fernald, Jordi Galí, Martin Gervais, Thomas Sargent, and Lars Hansen for helpful conversations and two anonymous referees and an editor for valuable comments. Thanks also to Gadi Barlevy and Jeff Campbell for many helpful discussions and extensive comments on an earlier draft. I am also grateful to Jason Cummins and Gianluca Violante for their data. Any views expressed herein do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://public.econ.duke.edu/~staff/wrkshop_papers/2005-Fall/Fisher2.pdf |
| Alternate Webpage(s) | http://pages.stern.nyu.edu/~dbackus/GE_asset_pricing/Fisher%20tech%20shocks%20May%2005.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
