Sectoral Solow residuals

A. Craig Burnside*, Martin S. Eichenbaum, Sergio T. Rebelo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

48 Scopus citations

Abstract

This paper presents capital utilization corrected measures of technology shocks for aggregate and disaggregated (two-digit Standard Industrial Classification code) industries. We correct for variations in capital utilization by employing industrial electrical use as a measure of capital services. In contrast, the standard measures of technology shocks used in the Real Business Cycle literature are based on economy wide data and assume that capital services are proportional to the stock of measured capital. To assess the impact of these differences, we contrast selected properties of the competing technology shock measures. We argue that the properties of technology shocks for the manufacturing sector are quite different than those used in the RBC literature. We also find that correcting for capital utilization has important implications for the properties of the Solow residual.

Original languageEnglish (US)
Pages (from-to)861-869
Number of pages9
JournalEuropean Economic Review
Volume40
Issue number3-5
DOIs
StatePublished - Apr 1996

Keywords

  • Business cycles
  • Productivity
  • Solow residual

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Sectoral Solow residuals'. Together they form a unique fingerprint.

Cite this