King, Robert G.; Rebelo, Sergio T. - University of Rochester - Center for Economic Research … - 2000
to produce realistic business cycles. While Solow residuals are sufficiently volatile, these imply frequent technological … imminent demise of real business cycles. However, we show that greater factor variation also dramatically amplifies shocks: a … RBC model with varying capital utilization yields realistic business cycles from small, nonnegative changes in technology. …