| By: |
Fabio Canova (Universitat Pompeu Fabra);
David López-Salido (Banco de España; Centre for Economic Policy Research (CEPR));
Claudio Michelacci (Centro de Estudios Monetarios y Financieros (CEMFI)) |
| Abstract: |
We analyze the effects of neutral and investment-specific technology shocks on
hours worked and unemployment. We characterize the response of unemployment in
terms of job separation and job finding rates. We find that job separation
rates mainly account for the impact response of unemployment while job finding
rates for movements along its adjustment path. Neutral shocks increase
unemployment and explain a substantial portion of unemployment and output
volatility; investment-specific shocks expand employment and hours worked and
mostly contribute to hours worked volatility. We show that this evidence is
consistent with the view that neutral technological progress prompts
Schumpeterian creative destruction, while investment specific technological
progress has standard neoclassical features. |
| Keywords: |
search frictions, technological progress, creative destruction |
| JEL: |
E00 J60 O33 |
| Date: |
2007–07 |
| URL: |
http://d.repec.org/n?u=RePEc:bde:wpaper:0719&r=tid |