Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence

Anzoategui, D, Comin, D, Gertler, M and Martinez, J (2019) Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence. American Economic Journal: Macroeconomics, 11 (3). pp. 67-110. ISSN 1945-7707 OPEN ACCESS


We examine the hypothesis that the slowdown in productivity following the Great Recession was in significant part an endogenous response to the contraction in demand that induced the downturn. We motivate, develop and estimate a model with an endogenous TFP mechanism that allows for costly development and adoption of technologies. Our main finding is that a significant fraction of the post-Great Recession fall in productivity was an endogenous phenomenon, suggesting that demand factors played an important role in the post-crisis slowdown of capacity growth. More generally, we provide insight into why recoveries from financial crises may be so slow.

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Item Type: Article
Subject Areas: Economics
Date Deposited: 28 Nov 2018 11:42
Date of first compliant deposit: 28 Nov 2018
Subjects: Financial markets
Business cycles
Last Modified: 17 Jul 2024 01:49
URI: https://lbsresearch.london.edu/id/eprint/1035

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