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- W3121577639 abstract "Abstract Uncertainty rises in recessions. But does uncertainty cause downturns or vice versa? This paper argues that counter-cyclical uncertainty fluctuations are a by-product of technology growth. In a firm dynamics model with endogenous technology adoption, faster technology growth widens the dispersion of firm-level productivity shocks, a benchmark uncertainty measure. Moreover, faster technology growth spurs a creative destruction process, generates a temporary downturn, and renders uncertainty counter-cyclical. Estimates from structural vector autoregressions (VARs) on U.S. data confirm the model’s predictions. On average, 1/4 of the cyclical variation in uncertainty is driven by technology shocks. This fraction rises to 2/3 around the “dot-com” bubble." @default.
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- W3121577639 date "2019-08-13" @default.
- W3121577639 modified "2023-09-26" @default.
- W3121577639 title "Creative Destruction and Uncertainty" @default.
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- W3121577639 doi "https://doi.org/10.1093/jeea/jvz047" @default.
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