Do svar models justify discarding the technology-shock-driven real business cycle hypothesis?

Hyeon Seung Huh, David Kim

Research output: Contribution to journalArticle


This study investigates the validity of technology shocks as a driving force of US business cycle fluctuations. Using three well-known structural vector autoregression (SVAR) models, we analyse how structural shocks are associated with the variations of output and hours worked at business cycle frequencies. Empirical results reveal that technology shocks remain an important source of cyclical movements in output. Furthermore, a positive technology shock does not lead to a decline in hours worked, in contrast to previous studies. Our SVAR-based evidence does not support discarding a technology-shock-driven business cycle theory.

Original languageEnglish
Pages (from-to)98-118
Number of pages21
JournalEconomic Record
Issue number288
Publication statusPublished - 2014 Mar 1


All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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