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A number of studies demonstrate that a positive technology shock leads to a short-run decline in hours (employment). This paper shows that a standard flexible price model can deliver the… Click to show full abstract
A number of studies demonstrate that a positive technology shock leads to a short-run decline in hours (employment). This paper shows that a standard flexible price model can deliver the negative response of hours to the technology shock when hyperbolic discounting is incorporated into the model. This paper also finds that the model can produce similar dynamic responses of key macroeconomic aggregates to those corroborated by previous empirical studies.
Keywords:
technology shock;
revisiting effect;
shock hours;
effect technology;
technology
Journal Title: Economics Letters
Year Published: 2017
Link to full text (if available)
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Journal Title: Economics Letters
Year Published: 2017
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!