Technology shocks remain key driver of US business cycle fluctuations.
The study looked at whether technology shocks drive U.S. business cycles. By using three different models, the researchers found that technology shocks are still a big factor in causing fluctuations in output. Surprisingly, a positive technology shock doesn't lead to less hours worked, which goes against what was previously thought. Overall, the evidence from the models doesn't support the idea of throwing out the theory that technology shocks are behind business cycles.