Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Edin and Shaefer's book a call to action for Americans to deal with poverty

Weir says pain may underlie rise in suicide and substance-related deaths among white middle-aged Americans

Weitzman says China's one-child policy has had devastating effects on first-born daughters


MCubed opens for new round of seed funding, November 4-18

PSC News, fall 2015 now available

Barbara Anderson appointed chair of Census Scientific Advisory Committee

John Knodel honored by Thailand's Chulalongkorn University

Next Brown Bag

Monday, Dec 7 at noon, 6050 ISR-Thompson
Daniel Eisenberg, "Healthy Minds Network: Mental Health among College-Age Populations"

Are Technology Improvements Contractionary?

Publication Abstract

Basu, S., J. Fernald, and Miles Kimball. 2006. "Are Technology Improvements Contractionary?" American Economic Review, 96(5): 1418-1448.

Yes. We construct a measure of aggregate technology change, controlling for aggregation effects, varying utilization of capital and labor, nonconstant returns, and imperfect competition. On impact, when technology improves, input use and nonresidential investment fall sharply. Output changes little. With a lag of several years, inputs and investment return to normal and output rises strongly. The standard one-sector real-business-cycle model is not consistent with this evidence. The evidence is consistent, however, with simple sticky-price models, which predict the results we find: when technology improves, inputs and investment generally fall in the short run, and output itself may also fall.

DOI:10.1257/000282806779396201 (Full Text)

Browse | Search : All Pubs | Next