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Technology shocks and job flows

Claudio Michelacci () and David Lopez-Salido ()

No 308, Working Papers from Banco de España

Abstract: We decompose the low-frequency movements in labour productivity into an investment-neutral and investment-specific technology component. We show that neutral technology shocks cause a short run increase in job creation and job destruction and leads to a reduction in aggregate employment. Investmentspecific technology shocks reduce job destruction, have mild effects on job creation and are expansionary. We construct a general equilibrium search model with neutral and investment-specific technological progress. We show that the model can replicate these findings if neutral technological progress is mainly embodied into new jobs, while investment-specific technological progress benefits (almost) equally old and new jobs. This provides evidence in favor of models where old jobs can (at least partially) reap the benefits of ongoing technological progress.

Keywords: Search frictions; business cycle; creative destruction (search for similar items in EconPapers)
JEL-codes: E00 J60 O00 (search for similar items in EconPapers)
Pages: 85 pages
Date: 2003-06
References: View references in EconPapers View complete reference list from CitEc
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Downloads: (external link) ... o/03/Fic/dt0308e.pdf First version, June 2003 (application/pdf)

Related works:
Journal Article: Technology Shocks and Job Flows (2007) Downloads
Working Paper: Technology Shocks and Job Flows (2004) Downloads
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