Business Cycles With A Common Trend in Neutral and Investment-Specific Productivity
Stephanie Schmitt-Grohé; Martín Uribe;
Subject: Common Trend; Investment Specific Technlogy Shocks; Maximum Likelihood Estimation of DSGE Model; Neutral Technology Shocks; Sources of Business Cycles
jel: jel:E32 | jel:E31
This paper identifies a new source of business-cycle fluctuations. Namely, a common stochastic trend in neutral and investment-specific productivity. We document that in U.S. postwar quarterly data total factor productivity (TFP) and the relative price of investment are... View more
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