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

José-Víctor Ríos-Rull, Frank Schorfheide (), Cristina Fuentes-Albero (), Maxym Kryshko and Raül Santaeulàlia-Llopis

No 15375, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: C1 C8 E3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge and nep-pke
Date: 2009-09
Note: EFG ME
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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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