allows increases in measured productivity in response to increases in expenditures via higher search effort from households … utilization and fixed costs to generate procyclical productivity, firms do not have to spend more to achieve it. We estimate the …

Measured productivity is strongly procyclical. Real business cycle theories suggest that actual fluctuations in … productivity are the source of fluctuations in aggregate output. Keynesian theories maintain that fluctuations in aggregate output … to explain the procyclicality of productivity. If observed productivity shocks are true productivity shocks, a function …