Neutral Technology Shocks and the Dynamics of Labor Input: Results from an Agnostic Identification

20 Pages Posted: 24 Feb 2012

See all articles by Haroon Mumtaz

Haroon Mumtaz

University of London - School of Sciences

Francesco Zanetti

Bank of England

Date Written: February 2012

Abstract

This article studies the dynamic response of labor input to neutral technology shocks. It uses benchmark dynamic, stochastic, general equilibrium models enriched with labor market search and matching frictions and investmentā€specific technological progress that enables a new, agnostic, identification scheme based on sign restrictions on a structural vector autoregression (SVAR). The estimation supports an increase of labor input in response to neutral technology shocks. This finding is robust across different perturbations of the SVAR model.

Suggested Citation

Mumtaz, Haroon and Zanetti, Francesco, Neutral Technology Shocks and the Dynamics of Labor Input: Results from an Agnostic Identification (February 2012). International Economic Review, Vol. 53, Issue 1, pp. 235-254, 2012. Available at SSRN: https://ssrn.com/abstract=2010303 or http://dx.doi.org/10.1111/j.1468-2354.2011.00678.x

Haroon Mumtaz (Contact Author)

University of London - School of Sciences ( email )

London, WC1E 7HX
United Kingdom

Francesco Zanetti

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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