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Dynamic Structure of Macroeconomic Technology Shocks

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Part of the book series: Dynamic Modeling and Econometrics in Economics and Finance ((DMEF,volume 2))

Abstract

In the Real Business Cycle approach to macroeconomic theory, the business cycle is taken to be driven by exogenous technological shocks. E.g., see Kydland and Prescott (1982), Prescott (1986). Solow (1957) showed that an observable measure of exogenous technological shocks is provided by the difference between the rate of growth of output and the share-weighted growth rates of the inputs to production if there are constant returns to scale, all input factors are fully variable, and there is perfect competition in the product and factor markets.

Material in this chapter is drawn from Altug, Ashley and Patterson (1999).

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References

  • Altug, S., R. Ashley, R., and D. M. Patterson (1999) “Are Technology Shocks Nonlinear?” Macroeconomic Dynamics, forthcoming.

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  • Kydland, F. and E. Prescott (1982). “Time-to-build and aggregate fluctuations. Econometrica 50, 1345–1370.

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  • Prescott, E. (1986). “Theory ahead of business cycle measurement.” Carnegie-Rochester Conference Series on Public Policy 25, 11–44.

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  • Solow, R. (1957). “Technical change and the aggregate production function.” Review of Economics and Statistics 39, 312–320.

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© 2000 Springer Science+Business Media New York

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Patterson, D.M., Ashley, R.A. (2000). Dynamic Structure of Macroeconomic Technology Shocks. In: A Nonlinear Time Series Workshop. Dynamic Modeling and Econometrics in Economics and Finance, vol 2. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-8688-7_10

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  • DOI: https://doi.org/10.1007/978-1-4419-8688-7_10

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-1-4613-4665-4

  • Online ISBN: 978-1-4419-8688-7

  • eBook Packages: Springer Book Archive

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