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Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Postwar U.S. Data?

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Author Info
Pau Rabanal
Jordi Galí

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Abstract

Our answer: Not so well. We reached 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 comovement between output and labor input measures.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/234.

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Length: 66 pages
Date of creation: 05 Jan 2005
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Handle: RePEc:imf:imfwpa:04/234

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Keywords: Business cycles ; United States ; Economic models ;

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