Title: Technology Shocks and Aggregate Fluctuations: How Well Does the RBS Model Fit Postwar U.S. Data?
Abstract: Our answer: not so well.We reach that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations.The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.