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Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?

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Author Info
Galí, Jordi
Rabanal, Pau

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Abstract

Our answer: not so well. We reach that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive co-movement between output and labor input measures.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4522.

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Date of creation: Aug 2004
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Handle: RePEc:cpr:ceprdp:4522

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Related research
Keywords: nominal rigidities; real business cycles; real frictions; technology shocks;

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Find related papers by JEL classification:
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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