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

PSC In The News

RSS Feed icon

Lam looks at population and development in next 15 years in UN commission keynote address

Mitchell et al. find harsh family environments may magnify disadvantage via impact on 'genetic architecture'

Frey says Arizona's political paradoxes explained in part by demography

Highlights

NIH announces new policy for resubmissions (4/17/14)

2014 PAA Annual Meeting, May 1-3, Boston

PSC newsletter spring 2014 issue now available

Raghunathan appointed director of Survey Research Center

Next Brown Bag


PSC Brown Bags will return in the fall

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