Paper #1012

Títol:

Schumpeterian technology shocks

Autors:

Fabio Canova, David Lopez-Salido i Claudio Michelacci

Data:

Maig 2006

Resum:

We analyze the labor market effects of neutral and investment-specific technology shocks along the intensive margin (hours worked) and the extensive margin (unemployment). We characterize the dynamic response of unemployment in terms of the job separation and the job finding rate. Labor market adjustments occur along the extensive margin in response to neutral shocks, along the intensive margin in response to investment specific shocks. The job separation rate accounts for a major portion of the impact response of unemployment. Neutral shocks prompt a contemporaneous increase in unemployment because of a sharp rise in the separation rate. This is prolonged by a persistent fall in the job finding rate. Investment specific shocks rise employment and hours worked. Neutral shocks explain a substantial portion of the volatility of unemployment and output; investment specific shocks mainly explain hours worked volatility. This suggests that neutral progress is consistent with Schumpeterian creative destruction, while investment-specific progress operates as in a neoclassical growth model.

Paraules clau:

Search frictions, technological progress, creative destruction

Codis JEL:

E00, J60, O33

Àrea de Recerca:

Macroeconomia i Economia Internacional

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