Abstract

http://ssrn.com/abstract=425004
 
 

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What Happens After a Technology Shock?


Lawrence J. Christiano


Northwestern University; Federal Reserve Bank of Cleveland; Federal Reserve Bank of Chicago; Federal Reserve Bank of Minneapolis; National Bureau of Economic Research (NBER)

Martin Eichenbaum


Northwestern University; National Bureau of Economic Research (NBER)

Robert Vigfusson


Federal Reserve Board - Trade and Quantitative Studies

June 2003

FRB International Finance Discussion Paper No. 768

Abstract:     
We provide empirical evidence that a positive shock to technology drives up per capita hours worked, consumption, investment, average productivity and output. This evidence contrasts sharply with the results reported in a large and growing literature that argues, on the basis of aggregate data, that per capita hours worked fall after a positive technology shock. We argue that the difference in results primarily reflects specification error in the way that the literature models the low-frequency component of hours worked.

Number of Pages in PDF File: 54

Keywords: productivity, long-run restriction, hours worked, weak instruments

JEL Classification: E32, E24

working papers series


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Date posted: August 18, 2003  

Suggested Citation

Christiano, Lawrence J. and Eichenbaum, Martin and Vigfusson, Robert, What Happens After a Technology Shock? (June 2003). FRB International Finance Discussion Paper No. 768. Available at SSRN: http://ssrn.com/abstract=425004 or http://dx.doi.org/10.2139/ssrn.425004

Contact Information

Lawrence J. Christiano
Northwestern University ( email )
2003 Sheridan Road
Evanston, IL 60208
United States
847-491-8231 (Phone)
847-491-7001 (Fax)
Federal Reserve Bank of Cleveland
East 6th & Superior
Cleveland, OH 44101-1387
United States
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL 60604
United States
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN 55480
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Martin Eichenbaum
Northwestern University ( email )
2003 Sheridan Road
Evanston, IL 60208
United States
847-491-8232 (Phone)
847-491-7001 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Robert John Vigfusson (Contact Author)
Federal Reserve Board - Trade and Quantitative Studies ( email )
20th St. and Constitution Ave.
Washington, DC 20551
United States
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