Economics at your fingertips  

Real exchange rate and international spillover effects of US technology shocks

Mathias Klein and Ludger Linnemann

Journal of International Economics, 2021, vol. 129, issue C

Abstract: The paper presents new empirical evidence on the international effects of surprise and anticipated technology shocks in the US. We employ the proxy-instrumental variable approach to identify structural vector autoregressions in a panel setting and empirically study the transmission of US technology innovations to the G7 countries. Both unanticipated and anticipated exogenous technology improvements lead to a strong and persistent real appreciation (from the point of view of the US), along with an expansionary effect on US macroeconomic aggregates, except for hours worked which initially decline. Internationally, there is a strong and precisely estimated positive spillover on foreign output, consumption, and hours worked in the case of surprise shocks, and a weaker but still mostly non-negative effect in the case of technology news shocks. We show that the empirical evidence is qualitatively compatible with the predictions of a New Keynesian international business cycle model with imperfect financial markets, traded and non-traded goods and imported intermediate inputs in production.

Keywords: International transmission of technology shocks; News shocks; Real exchange rate; Proxy-vector autoregressions (search for similar items in EconPapers)
JEL-codes: E32 F31 F41 F44 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
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:

DOI: 10.1016/j.jinteco.2020.103414

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-06-30
Handle: RePEc:eee:inecon:v:129:y:2021:i:c:s002219962030129x