Diego Comin (Dartmouth) will present:
"Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence"
at 12:15pm on Tuesday, October 6, 2015 in 051 Buchanan (Volanakis) - TUCK
Lunch will be served at noon.


If you will be attending the Lunch Seminar please RSVP to Richard Rielly at TUCK so he can order the appropriate amount of food.
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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. To do so we augment a workhorse New Keynesian DSGE model with an endogenous TFP mechanism that allows for both costly development and adoption of new technologies. We then estimate the model and use it to assess the sources of the productivity slowdown. We find that the post-Great Recession fall in productivity was a largely endogenous phenomenon. The endogenous productivity mechanism also helps account for the slowdown in productivity prior to the Great Recession. Overall, the results are consistent with the view that demand factors have played a role in the slowdown of capacity growth. More generally, they provide insight into why recoveries from financial crises may be so slow.






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