EconPapers    
Economics at your fingertips  
 

Are Technology Improvements Contractionary?

Miles Kimball, John Fernald () and Susanto Basu

American Economic Review, 2006, vol. 96, issue 5, 1418-1448

Abstract: Yes. We construct a measure of aggregate technology change, controlling for aggregation effects, varying utilization of capital and labor, nonconstant returns, and imperfect competition. On impact, when technology improves, input use and nonresidential investment fall sharply. Output changes little. With a lag of several years, inputs and investment return to normal and output rises strongly. The standard one-sector real-business-cycle model is not consistent with this evidence. The evidence is consistent, however, with simple sticky-price models, which predict the results we find: when technology improves, inputs and investment generally fall in the short run, and output itself may also fall. (JEL E22, E32, O33)

Date: 2006
Note: DOI: 10.1257/aer.96.5.1418
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (530)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.96.5.1418 (application/pdf)
http://www.aeaweb.org/aer/data/dec06/20040577_data.zip (application/zip)
http://www.aeaweb.org/aer/data/dec06/20040577_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Are technology improvements contractionary? (2004) Downloads
Working Paper: Are Technology Improvements Contractionary? (2004) Downloads
Working Paper: Are Technology Improvements Contractionary? (2002) Downloads
Working Paper: Are technology improvements contractionary? (1998) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:96:y:2006:i:5:p:1418-1448

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2025-03-19
Handle: RePEc:aea:aecrev:v:96:y:2006:i:5:p:1418-1448