The role of investment-specific technological change in the business cycle

Jeremy Greenwood, Zvi Hercowitz, Per Krusell*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This is a quantitative investigation of the importance of technological change specific to new investment goods for postwar US aggregate fluctuations. A growth model that incorporates this form of technological change is calibrated to US data and simulated, using the relative price of new equipment to identify the process driving investment-specific technology shocks. The analysis suggests that this form of technological changes is the source of about 30% of output fluctuations.

Original languageEnglish
Pages (from-to)91-115
Number of pages25
JournalEuropean Economic Review
Volume44
Issue number1
DOIs
StatePublished - Jan 2000

Keywords

  • Business cycles
  • Equipment investment
  • Technological change

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