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The effects of technology shocks on hours and output: a robustness analysis
Author(s) -
Canova Fabio,
LopezSalido David,
Michelacci Claudio
Publication year - 2010
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.1090
Subject(s) - uncorrelated , robustness (evolution) , economics , econometrics , investment (military) , monetary economics , variance (accounting) , shock (circulatory) , statistics , mathematics , chemistry , medicine , biochemistry , accounting , politics , political science , law , gene
Abstract We analyze the effects of neutral and investment‐specific technology shocks on hours and output. Long cycles in hours are removed 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 ’ are uncorrelated with the estimated technology shocks. Copyright © 2009 John Wiley & Sons, Ltd.