We estimate a New-Neoclassical Synthesis model of the business cycle with two investment shocks. The first, an … investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the … relative price of investment. The second shock affects the production of installed capital from investment goods or, more …

. We use the theory to compare current accounting measures for labor productivity and investment with the corresponding … by introducing intangible investment and non-neutral technology change with respect to producing intangible investment … goods and find that the 1990s are not puzzling in light of this new theory. There is compelling micro and macro evidence for …