Endogenous technology adoption and R & D as sources of business cycle persistence

Diego Anzoategui, Diego Comin, Mark Gertler, Joseba Martinez

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)67-110
Number of pages44
JournalAmerican Economic Journal: Macroeconomics
Volume11
Issue number3
DOIs
StatePublished - Jul 1 2019

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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