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 words technology and/or shock:
“The successor to politics will be propaganda. Propaganda, not in the sense of a message or ideology, but as the impact of the whole technology of the times.”
—Marshall McLuhan (1911–1980)
“It is a great shock at the age of five or six to find that in a world of Gary Coopers you are the Indian.”
—James Baldwin (1924–1987)