‘Dynamic effects of technological innovations’

Francisco Obiols Homs, Hugo Rodríguez Mendizabal, Judith Panadés Martí, Máximo Camacho Alonso.

The project will unfold along two parallel lines. The first will comprise a study of the behaviour of real cycles in an economy characterised by non linear stochastic processes. The literature of real business cycles studies cycles as a product of technological innovations generated by autoregressive processes.

However, it has recently been found that the real cycles of developed economies are better explained by non linear models in which the economy moves between two states; a long recessionary one and a shorter expansionary one. This conduct is observed across all major variables like GDP, consumption and investment.

Our second line of investigation is a quantitative analysis of competitive equilibrium in an economy characterised by aggregate factor productivity shocks owing to technological innovations, endogenous work decisions under the assumption that working hours are indivisible and incomplete unemployment insurance markets with restrictions on credit.