Working Paper: NBER ID: w10636
Authors: Jordi Gali; Pau Rabanal
Abstract: 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.
Keywords: Technology shocks; Aggregate fluctuations; RBC model; Postwar US data
JEL Codes: E32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technology shocks (O33) | Aggregate fluctuations (E10) |
| Technology shocks (O33) | Output (Y10) |
| Technology shocks (O33) | Labor input (J22) |
| Technology shocks (O33) | Productivity (O49) |
| Demand factors (J23) | Aggregate fluctuations (E10) |
| Calibrated RBC models (C59) | Actual data patterns (Y10) |