Labour Share and Productivity Dynamics

Se Kyu Choi; Jose-Victor Rios-Rull

doi:10.1093/ej/ueaa137

Labour Share and Productivity Dynamics

Se Kyu Choi^*, Jose-Victor Rios-Rull

^*Corresponding author for this work

School of Economics

Research output: Contribution to journal › Article (Academic Journal) › peer-review

3 Citations (Scopus)

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Abstract

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 language	English
Article number	ueaa137
Journal	Economic Journal
Volume	0
DOIs	https://doi.org/10.1093/ej/ueaa137
Publication status	Published - 21 Dec 2020

Research Groups and Themes

ECON Macroeconomics
ECON CEPS Welfare
ECON CEPS Data

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Dr Se Kyu Choi
- sekyu.choibristol.acuk
- School of Economics - Associate Professor
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Cite this

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title = "Labour Share and Productivity Dynamics",

abstract = "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 residualand 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.",

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AU - Rios-Rull, Jose-Victor

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AB - 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 residualand 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.

U2 - 10.1093/ej/ueaa137

DO - 10.1093/ej/ueaa137

M3 - Article (Academic Journal)

SN - 0013-0133

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JF - Economic Journal

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Labour Share and Productivity Dynamics

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Dr Se Kyu Choi

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