Technology shocks are events in a macroeconomic model, that change the production function. Usually this is modelled with an aggregate production function that has a scaling factor.
A technology shock affects an industry or firm's productivity, this may be a positive shock - increasing the output for a given set of inputs, or a negative shock - decreasing the output for a given set of inputs. Negative shocks are much less common than positive shocks as technology rarely moves backwards.
Famous quotes containing the word shock:
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