ON THE ROLE OF TECHNOLOGY SHOCKS AS A SOURCE OF BUSINESS CYCLES: SOME NEW EVIDENCE

I provide some new evidence that reinforces the conclusion in Gali (1999) that exogenous variations in technology play a very limited role, if any, as sources of the business cycle. First, I provide evidence that supports the identification of technology shocks proposed in that paper. Second, I show that similar findings obtain when the same approach is implemented for the Euro area, using a newly available data set. (JEL: E32, E24)