Endogenous technology adoption and R&D as sources of business cycle persistence
Journal
American Economic Journal: Macroeconomics
Subject
Economics
Publishing details
Authors / Editors
Anzoategui D;Comin D;Gertler M;Martinez J
Biographies
Publication Year
2019
Abstract
We examine the hypothesis that the slowdown in productivity following the Great Recession was in significant part an endogenous response to the contraction in demand that induced the downturn. We motivate, develop, and estimate a model with an endogenous TFP mechanism that allows for costly development and adoption of technologies. Our main finding is that a significant fraction of the post-Great Recession fall in productivity was an endogenous phenomenon, suggesting that demand factors played an important role in the postcrisis slowdown of capacity growth. More generally, we provide insight into why recoveries from financial crises may be so slow.
Available on ECCH
No