Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Postwar U.S. Data?

Jordi Galí and Pau Rabanal

No 2004/234, IMF Working Papers from International Monetary Fund

Abstract: Our answer: Not so well. We reached 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 comovement between output and labor input measures.

Keywords: WP; business cycle; monetary policy; Real Business Cycles; Technology Shocks; Nominal Rigidities; Real Frictions; RBC model; time series; standard deviation; real wage; business cycle fluctuation; technology shock; point estimate; business cycle model; RBC literature; positive correlation; production function; Business cycles; Labor productivity; Sticky prices (search for similar items in EconPapers)
Pages: 67
Date: 2004-12-01
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Citations: View citations in EconPapers (239)

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Related works:
Working Paper: Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data? (2004)
Working Paper: Technology Shocks and Aggregate Fluctuations: How Well Does the RBS Model Fit Postwar U.S. Data? (2004)
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