Technology,employment and the business cycle in post-transition countries of the EU |
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Authors: | Vladimir Ar?abi? |
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Institution: | Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia |
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Abstract: | This article analyses the importance of technology and non-technology shocks in the business cycles of European Union post-transition countries. Different assumptions of New Keynesian and Real Business Cycle theory are tested. The results demonstrate that a non-technology shock is more important in explaining business cycles in post-transition countries, although a technology shock is not trivial. The technology shock cannot replicate basic business cycle facts observed in the data: it produces a low or negative correlation between employment and GDP, and a strong negative correlation between labour productivity and employment. Technology and non-technology GDP components are analysed in the transition and post-transition period. The results show a non-technology shock was the dominant source of business cycles both during and after the transition period. |
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Keywords: | Business cycles post-transition countries New-Keynesian theory technology shocks nominal rigidities SVAR model |
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