Revisiting the “Productivity-Hours Puzzle” in the RBC Paradigm: The Role of Investment Adjustment Costs

Conventional RBC models have been heavily criticized for their inability to generate the estimated negative correlations of hours and productivity in response to technology shocks ('productivity-hours puzzle'). In this paper we show that by just enhancing the standard frame- work with investment adjustment costs can resolve the 'productivity-hours puzzle'.

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Year of publication:	2012-02
Authors:	Albonico, Alice ; Kalyvitis, Sarantis ; Pappa, Evi
Institutions:	Dipartimento di Scienze Economiche e Aziendali, Università degli Studi di Pavia
Subject:	technology shocks \| productivity-hours puzzle \| investment adjustment costs \| wealth effect

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Extent:	application/pdf
Series:	Quaderni di Dipartimento.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 164 18 pages
Classification:	E22 - Capital; Investment (including Inventories); Capacity ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009651039