"Gali and Rabanal provide statistical evidence that, in their view, puts into question the real business cycle paradigm in favor of the sticky-price paradigm. I demonstrate that their statistical procedure is easily misled in that they would reach the same conclusions even if their data had been...

Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the...

Intro -- Contents -- I. INTRODUCTION -- II. ESTIMATING THE EFFECTS OF TECHNOLOGY SHOCKS -- III. POSSIBLE PITFALLS IN THE ESTIMATION OF THE EFFECTS OF TECHNOLOGY SHOCKS -- IV. EXPLAINING THE EFFECTS OF TECHNOLOGY SHOCKS -- V. TECHNOLOGY SHOCKS AND THE BUSINESS CYCLE IN AN ESTIMATED DSGE MODEL --...