Technology Shocks and Aggregate Fluctuations: How Well Does the Real Business Cycle Model Fit Postwar U.S. Data?
By J. Gaĺı, Pau Rabanal. NBER macroeconomics annual, 2004
181 citations recorded by the source corpus.
Our answer: not so well. We reach that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/c9b1a9b9dfd98a4d06086ebf0d401f46a98cb7bc
How researchers see this paper
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In Economics and Econometrics
- V. Ramey
- John G. Fernald
- Luca Guerrieri
- C. Erceg
- Christopher J. Gust
- José-Víctor Ríos-Rull
- Raül Santaeulàlia-Llopis
- Tommaso Monacelli
Citations in the corpus
- Can Long-Run Restrictions Identify Technology Shocks? (2005, methodology): “This research has included papers by Francis and Ramey (2003) and Gaĺı and Rabanal (2005), that broadly lent support to Gaĺı’s original conclusion, while Christiano, Eichenbaum, and Vigfusson (2003) favored a VAR specification that implies a rise in hours worked following a technology shock.”
- Trend Breaks, Long-Run Restrictions, and Contractionary Technology Improvements: Appendix (2007, background): “Francis and Ramey (2005a) and Galí and Rabanal (2004) suggest removing a quadratic trend from hours.”
- Redistributive shocks and productivity shocks (2010, background): “…(2005) and Uhlig (2004) for alternative identification strategies; and Chari, Kehoe, and McGrattan (2008), Erceg, Guerrieri, and Gust (2005), and Gaĺı and Rabanal (2005) regarding misspecification. the overshooting response of labor share to productivity innovations and reviewing the cyclical…”
- Measures of per Capita Hours and Their Implications for the Technology‐Hours Debate (2009, background): “This conclusion challenges the core of the long-standing Real Business Cycle (hereafter RBC) theory, thus, it comes as no surprise that so many recent papers have been written either in defense of or to challenge Galí’s findings (see Galí and Rabanal (2004) for a review of the literature).”