Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence

Diego Anzoategui, Diego Comin, Mark Gertler and Joseba Martinez

American Economic Journal: Macroeconomics, 2019, vol. 11, issue 3, 67-110

Abstract: We examine the hypothesis that the slowdown in productivity following the Great Recession was in significant part an endogenous response to the contraction in demand that induced the downturn. We motivate, develop, and estimate a model with an endogenous TFP mechanism that allows for costly development and adoption of technologies. Our main finding is that a significant fraction of the post-Great Recession fall in productivity was an endogenous phenomenon, suggesting that demand factors played an important role in the postcrisis slowdown of capacity growth. More generally, we provide insight into why recoveries from financial crises may be so slow.

JEL-codes: E23 E24 E32 E44 G01 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mac.20170269
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Citations: View citations in EconPapers (156)

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Working Paper: Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence (2016)
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