Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations

  title={Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations},
  author={Jordi Gal{\'i}},
  journal={NBER Working Paper Series},
  • J. Galí
  • Published 1 August 1996
  • Economics
  • NBER Working Paper Series
Using data for the G7 countries, I estimate conditional correlations of employment and productivity, based on a decomposition of the two series into technology and non-technology components. The picture that emerges is hard to reconcile with the predictions of the standard Real Business Cycle model. For a majority of countries the following results stand out: (a) technology shocks appear to induce a negative comovement between productivity and employment, counterbalanced by a positive… 

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