Labour Share and Productivity Dynamics

Se Kyu Choi, Jose-Victor Rios-Rull

Research output: Contribution to journalArticle (Academic Journal)peer-review


We pose technology shocks where the innovation is biased towards more recently installed plants. On one extreme the shock is like a neutral technological shock, while on the other end it resembles investment specic technological shocks. We embed these shocks in a model with putty-clay technology and estimate it requiring that the model replicates the volatility properties of the Solow residual
and the overshooting property of the labour share of output. Our estimates show that putty-clay nature of technology, a time bias towards new plants and competitive wage setting replicate well the overshooting property.
Original languageEnglish
Article numberueaa137
JournalEconomic Journal
Publication statusPublished - 21 Dec 2020

Structured keywords

  • ECON Macroeconomics
  • ECON CEPS Welfare
  • ECON CEPS Data

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