We build upon recent research that attributes the moderation of output volatility since the 1980s to the reduced volatility of the Total Factor Productivity (TFP) by investigating the linkage between energy price fluctuations and the stochastic process for TFP. First, we estimate a joint...

In "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis", Krusell, Ohanian, Rios-Rull, and Violante (2000) (KORV hereafter) analyzed the capital-skill complementarity hypothesis as an explanation for the behavior of the U.S. skill premium. We re-fit KORV's model with two...