New study reveals key factors driving economic cycles and investment trends.
The study looked at how different types of technology shocks affect the economy. They used a method called Bayesian model averaging to analyze many possible models. The results showed that certain features of the real business cycle model were supported, like how the economy responds to technology shocks in the long run. However, not all changes in the economy can be explained by technology shocks. The researchers found that there are multiple models that could fit the data well, and the choice of model can change the results significantly.