How do Canadian Hours Worked Respond to 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)
Northwestern University; National Bureau of Economic Research (NBER)
Federal Reserve Board - Trade and Quantitative Studies
FRB International Finance Discussion Paper No. 774
This paper investigates the response of hours worked to a
permanent technology shock. Based on annual data from Canada,
we argue that hours worked rise after a positive technology
shock. We obtain a similar result using annual data from the
United States. These results contradict a large literature that
claims that a positive technology shock causes hours worked to
fall. We find that the different results are due to the
literature making a specification error in the statistical
model of per capital hours worked. Finally, we present results
that Canadian monetary policy has accommodated technology shocks.
Number of Pages in PDF File: 22
Keywords: productivity, long-run restriction, hours worked, weak instruments
JEL Classification: O51working papers series
Date posted: October 6, 2003
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