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Discussion Paper Details

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Title: The Effects of Technology Shocks on Hours and Output: A Robustness Analysis

Author(s): Fabio Canova, J David López-Salido and Claudio Michelacci

Publication Date: February 2008

Keyword(s): Long cycles, News shocks, Structural VARs and Technology disturbances

Programme Area(s): International Macroeconomics

Abstract: We analyze the effects of neutral and investment-specific technology shocks on hours and output. Long cycles 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' that generically change expectations about future productivity, are uncorrelated with the estimated technology shocks.

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Bibliographic Reference

Canova, F, López-Salido, J and Michelacci, C. 2008. 'The Effects of Technology Shocks on Hours and Output: A Robustness Analysis'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6720