Technology News and the US Economy: Time Variation and Structural Changes
Tim Berg ()
Scottish Journal of Political Economy, 2015, vol. 62, issue 3, 227-263
This article examines the time-varying impact of technology news shocks on the US economy during the Post-World War II period using a time-varying parameter vector autoregression. The identification restrictions on the sign of the contemporaneous responses of observable variables are derived from a dynamic stochastic general equilibrium model and robust to parameter uncertainty. I find that the variance of news shocks has decreased over time, contributing to the Great Moderation in real activity and inflation. The importance of news shocks is, however, modest compared to technology surprise and non-technology shocks. Finally, I obtain evidence in favor of a substantial decline in wage rigidity, while the transmission to other variables has been stable.
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Working Paper: Technology news and the U.S. economy: Time variation and structural changes (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:62:y:2015:i:3:p:227-263
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