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

PSC In The News

RSS Feed icon

Savolainen links antisocial behavior in childhood to disadvantage and poverty in adulthood

Norton et al. put dollar value on relief from chronic pain for Americans age 50+

Seefeldt says TANF restrictions may limit program's help for poor Americans

More News

Highlights

Paula Fomby to succeed Jennifer Barber as Associate Director of PSC

PSC community celebrates Violet Elder's retirement from PSC

Neal Krause wins GSA's Robert Kleemeier Award

U-M awarded $58 million to develop ideas for preventing and treating health problems

More Highlights

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