Investment-specific technology shocks drive business cycle volatility, study finds.
The study looked at a model of how the economy works and used a method called Bayesian model averaging to see if the model's features match real-world data. They found that the model's predictions were supported by the evidence, especially after a big change in the economy around 1984. The study suggests that changes in technology are a big factor in how the economy goes up and down, with technology affecting investment more than other factors.