A Defense of RBC: Understanding the Puzzling Effects of Technology Shocks
نویسندگان
چکیده
The research led by Gali (AER 1999) and Basu et al. (AER 2006) raises two important questions regarding the validity of the RBC theory: (i) How important are technology shocks in explaining the business cycle? (ii) Do impulse responses to technology shocks found in the data reject the assumption of exible prices? This paper argues that the conditional impulse responses of the U.S. economy to technology shocks are not grounds to reject the notion that technology shocks are the main driving force of the business cycle and the assumption of exible prices, in contrary to the conclusions reached by the literature.
منابع مشابه
A Defense of RBC: Understanding the Puzzling E¤ects of Technology Shocks
The research led by Gali (AER 1999) and Basu et al. (AER 2006) raises two important questions regarding the validity of the RBC theory: (i) How important are technology shocks in explaining the business cycle? (ii) Do impulse responses to technology shocks found in the data reject the assumption of exible prices? This paper argues that the conditional impulse responses of the U.S. economy to t...
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