Discussion paper

DP4522 Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?

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 co-movement between output and labor input measures.

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Citation

Galí, J and P Rabanal (2004), ‘DP4522 Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?‘, CEPR Discussion Paper No. 4522. CEPR Press, Paris & London. https://cepr.org/publications/dp4522