Munich Personal RePEc Archive

Factor Demand Linkages, Technology Shocks and the Business Cycle

Holly, Sean and Petrella, Ivan (2010): Factor Demand Linkages, Technology Shocks and the Business Cycle.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_25672.pdf

Download (508kB) | Preview

Abstract

This paper argues that factor demand linkages can be important for the transmission of both sectoral and aggregate shocks. We show this using a panel of highly disaggregated manufacturing sectors together with sectoral structural VARs. When sectoral interactions are explicitly accounted for, a contemporaneous technology shock to all manufacturing sectors implies a positive response in both output and hours at the aggregate level. Otherwise there is a negative correlation, as in much of the existing literature. Furthermore, we find that technology shocks are important drivers of business cycle.

Available Versions of this Item

Logo of the University Library LMU Munich
MPRA is a RePEc service hosted by
the University Library LMU Munich in Germany.