On the Robust Effects of Technology Shocks on Hours Worked and Output

Canova, Fabio; Lopez-Salido, David; Michelacci, Claudio

doi:10.2139/ssrn.1002872

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On the Robust Effects of Technology Shocks on Hours Worked and Output

29 Pages Posted: 25 Jul 2007

See all articles by Fabio Canova

David Lopez-Salido

Board of Governors of the Federal Reserve System

Claudio Michelacci

Centre for Monetary and Financial Studies (CEMFI); Centre for Economic Policy Research (CEPR)

Date Written: November 2006

Abstract

We analyze the effects of neutral and investment-specific technology shocks on hours worked and output. Low frequency movements in hours are captured in a variety of ways. Hours robustly fall in response to neutral shocks and robustly increase in response to investment specific shocks. The percentage of the variance of hours (output) explained by neutral shocks is small (large); the opposite is true for investment specific shocks. News shocks and other shocks are uncorrelated with the estimated neutral and investment specific shocks.

Keywords: Technology disturbances, structural VARs, low frequency movements, news shocks

JEL Classification: E00, J60, O33

Suggested Citation: Suggested Citation

Canova, Fabio and Lopez-Salido, David and Michelacci, Claudio, On the Robust Effects of Technology Shocks on Hours Worked and Output (November 2006). Available at SSRN: https://ssrn.com/abstract=1002872 or http://dx.doi.org/10.2139/ssrn.1002872