Macrodynamic and Financial Effects of a Large-Scale Technology Change

Natalia Gershun
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Natalia Gershun: Department of Finance and Economics, Pace University, U.S.A.

International Journal of Business and Economics, 2004, vol. 3, issue 1, 67-81

Abstract: We examine the implications of technological change which results in large-scale capital depreciation for the macrodynamic and financial properties of a dynamic general equilibrium model. In an economy where investors fear a capital-devaluing change in technology, the introduction of the possibility of such an event helps to resolve the equity premium and risk-free rate puzzles.

Keywords: general equilibrium; asset pricing; technology shocks (search for similar items in EconPapers)
JEL-codes: E23 E32 G12 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ijb:journl:v:3:y:2004:i:1:p:67-81

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