Methods versus Substance: Measuring the Effects of Technology Shocks on Hours

Frank Schorfheide, Cristina Fuentes-Albero, Maxym Kryshko and Santaeulà lia-Llopis, Raül
Authors registered in the RePEc Author Service: José-Víctor Ríos-Rull and Raul Santaeulalia-Llopis ()

No 7474, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper, we employ both calibration and modern (Bayesian) estimation methods to assess the role of neutral and investment-specific technology shocks in generating fluctuations in hours. Using a neoclassical stochastic growth model, we show how answers are shaped by the identification strategies and not by the statistical approaches. The crucial parameter is the labor supply elasticity. Both a calibration procedure that uses modern assessments of the Frisch elasticity and the estimation procedures result in technology shocks accounting for 2% to 9% of the variation in hours worked in the data. We infer that we should be talking more about identification and less about the choice of particular quantitative approaches.

Keywords: Business cycle fluctuations; Calibration; Dsge model estimation; Technology shocks (search for similar items in EconPapers)
JEL-codes: C1 C8 E3 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-bec, nep-cba and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Working Paper: Methods versus substance: measuring the effects of technology shocks on hours (2009)
Working Paper: Methods versus Substance: Measuring the Effects of Technology Shocks on Hours (2009)
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