On the contribution of technology shocks to business cycles

S. Aiyagari

Quarterly Review, 1994, vol. 18, issue Win, 22-34

Abstract: This article contends that the various measures of the contribution of technology shocks to business cycles calculated using the real business cycle modeling method are not corroborated. The article focuses on a different and much simpler method for calculating the contribution of technology shocks, which takes account of facts concerning the productivity/labor input correlation and the variability of labor input relative to output. Under several standard assumptions, the method predicts that the contribution of technology shocks must be large (at least 78 percent), that the labor supply elasticity need not be large to explain the observed fluctuation in labor input, and that the contribution of technology shocks can be estimated fairly precisely. The method also estimates that the contribution of technology shocks could be lower than 78 percent under alternative assumptions. ; Reprinted in the Quarterly Review, Summer 1997 (v. 21, no. 3)

Keywords: Technology; Business cycles (search for similar items in EconPapers)
Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://minneapolisfed.org/research/qr/qr1812.pdf (application/pdf)
http://minneapolisfed.org/research/qr/qr1812.html (text/html)

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: https://EconPapers.repec.org/RePEc:fip:fedmqr:y:1994:i:win:p:22-34:n:v.18no.1

Access Statistics for this article

More articles in Quarterly Review from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Kate Hansel ().