R&D and Aggregate Fluctuations

Erhan Artuc and Panayiotis Pourpourides

No 2012-1, Working Papers from Central Bank of Cyprus

Abstract: Using US data for the period 1959-2007, we identify sectoral productivity shocks and capital investment-specific shocks by employing a Vector Autoregression whose shock structure is disciplined by a general equilibrium model. Controlling for real and nominal factors, we find that capital investment-specific shocks explain 70 percent of fluctuations of R&D investment while R&D technology shocks explain 30 percent of the variation of aggregate output net of R&D investment (i.e. the output of the non-R&D sector). Technology shocks jointly explain almost all the variation of output in the R&D sector and 78 percent of the variation of output in the non-R&D sector.

Keywords: Cycles; productivity shocks; investment-specific shocks; R&D; VAR. (search for similar items in EconPapers)
JEL-codes: C13 C32 C68 E32 O3 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2012-02
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Related works:
Journal Article: R&D and aggregate fluctuations (2014)
Working Paper: R&D and Aggregate Fluctuations (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cyb:wpaper:2012-1

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