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R&D Sectors and aggregate fluctuations

Pourpourides, Panayiotis and Artuç, Erhan 2012. R&D Sectors and aggregate fluctuations. [Working Paper]. Working Papers, vol. 1. Central Bank of Cyprus. Available at:

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Using US data for the period 1959-2007, we identify sectoral productivity shocks and capital investment-specific shocks by employing a Vector Autoregression whose shock structure is disciplined by a general equilibrium model. Controlling for real and nominal factors, we find that capital investment-specific shocks explain 70 percent of fluctuations of R&D investment while R&D technology shocks explain 30 percent of the variation of aggregate output net of R&D investment (i.e. the output of the non-R&D sector). Technology shocks jointly explain almost all the variation of output in the R&D sector and 78 percent of the variation of output in the non-R&D sector.

Item Type: Monograph (Working Paper)
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
Publisher: Central Bank of Cyprus
Last Modified: 04 Jun 2017 05:27

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