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Real business cycles, sticky wages or sticky prices? The impact of technology shocks on US manufacturing

Malley, J. R., Muscatelli, V.A., and Woitek, U. (2005) Real business cycles, sticky wages or sticky prices? The impact of technology shocks on US manufacturing. European Economic Review, 49(3). pp. 745-760. (doi:10.1016/S0014-2921(03)00073-4)

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Abstract

In this paper, we examine empirically the predictions of a range of theoretical models which give a prominent role to technology shocks in explaining business cycles. To this end, we estimate (4-digit SIC) industry-level VAR models for US manufacturing using real output, the real wage and utilization corrected measures of technology and labor input. Our results support both sticky-wage DGE and RBC models over sticky-price DGE models. Moreover, they cast some doubt on the importance of technology shocks as propulsive mechanism for business cycles at the industry level.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Muscatelli, Professor Anton and Woitek, Prof Ulrich and Malley, Professor James
Authors: Malley, J. R., Muscatelli, V.A., and Woitek, U.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:European Economic Review
Publisher:Elsevier B.V.
ISSN:0014-2921
ISSN (Online):1873-572X
Published Online:7 August 2003

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
231581Business Cycles and Long-run Growth: An Investigation for the OECD EconomicsAnton MuscatelliEconomic & Social Research Council (ESRC)R000237816Principal's Office