Capital-Embodied Technological Change, Measurement Errors and Real Business Cycles

Stephen Kosempel

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: Capital-embodied technological change is incorporated into a real business cycle (RBC) model, and some macroeconomic implications associated with errors in measurement are identified. In the model, measuremente errors arise in part because quality change is difficult to observe, and in part because of unexpected obsolescence due to changes in ten=chnology. The artificial economy outlined in this paper performs well, in terms of its ability to explain stylized facts of business cycles, as identified by the statistician. In particular, the model predicts a negative correlation between hours worked and the average priduct of labor.

Keywords: BUSINESS CYCLES; ENTERPRISES; TECHNOLOGICAL CHANGE; CAPITAL (search for similar items in EconPapers)
JEL-codes: D21 D24 D92 O32 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:sfu:sfudps:dp98-11

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