Measures of Per Capita Hours and their Implications for the Technology-Hours Debate

Neville Francis and Valerie Ramey

No 11694, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Structural vector autoregressions give conflicting results on the effects of technology shocks on hours. The results depend crucially on the assumed data generating process for hours per capita. We show that the standard measure of hours per capita has significant low frequency movements that are the source of the conflicting results. HP filtered hours per capita produce results consistent with the those obtained when hours are assumed to have a unit root. We provide an alternative measure of hours per capita that adjusts for low frequency movements in government employment, schooling, and the aging of the population. When the new measure is used to determine the effect of technology shocks on hours using long-run restrictions, both the levels and the difference specifications give the same answer: hours decline in the short-run in response to a positive technology shock.

JEL-codes: E2 E3 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-mac
Note: EFG LS
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Citations: View citations in EconPapers (31)

Published as Neville Francis & Valerie A. Ramey, 2009. "Measures of per Capita Hours and Their Implications for the Technology-Hours Debate," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(6), pages 1071-1097, 09.

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Related works:
Journal Article: Measures of per Capita Hours and Their Implications for the Technology-Hours Debate (2009)
Working Paper: Measures of Per Capita Hours and their Implications for the Technology-Hours Debate (2007)
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