Interpreting Investment-Specific Technology Shocks (IST)

Interpreting Investment-Specific Technology Shocks (IST)
Author :
Publisher : DIANE Publishing
Total Pages : 47
Release :
ISBN-10 : 9781437939071
ISBN-13 : 1437939074
Rating : 4/5 (074 Downloads)

Book Synopsis Interpreting Investment-Specific Technology Shocks (IST) by : Luca Guerrieri

Download or read book Interpreting Investment-Specific Technology Shocks (IST) written by Luca Guerrieri and published by DIANE Publishing. This book was released on 2011-05 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: IST shocks are often interpreted as multi-factor productivity (MFP) shocks in a separate investment-producing sector. However, this interpretation is strictly valid only when some stringent conditions are satisfied. Some of these conditions are at odds with the data. Using a two-sector model whose calibration is based on the U.S. Input-Output Tables, the authors consider the implications of relaxing several of these conditions. They show how the effects of IST shocks in a one-sector model differ from those of MFP shocks to an investment-producing sector of a two-sector model. MFP shocks induce a positive short-run correlation between consumption and investment consistent with U.S. data, while IST shocks do not. Illus. This is a print on demand report.


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