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.
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 |
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Article number | ueaa137 |
Journal | Economic Journal |
Volume | 0 |
DOIs | |
Publication status | Published - 21 Dec 2020 |
Research Groups and Themes
- ECON Macroeconomics
- ECON CEPS Welfare
- ECON CEPS Data