Schmitt-Grohé, Stephanie; Uribe, Martín - C.E.P.R. Discussion Papers - 2010
This paper identifies a new source of business-cycle fluctuations. Namely, a common stochastic trend in neutral and investment-specific productivity. We document that in U.S. postwar quarterly data total factor productivity (TFP) and the relative price of investment are cointegrated. We show...