Investment shocks drive US business cycles and prices like demand shock!
Investment shocks play a big role in causing ups and downs in the US economy. By studying a model with different factors, researchers found that these shocks drive prices up during good times, like when demand is high. Technology changes also affect the economy, but not as much as investment shocks. Labor supply changes have a big impact on work hours, especially over long periods. Competition and technology issues are key in how investment shocks affect the economy.