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 Jim
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:07 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