International Journal of Business and Economics

International Journal of Business and Economics
Volume 3, No. 1

April​, 2004
Macrodynamic and Financial Effects of a Large-Scale Technology Change
Natalia Gershun
Department of Finance and Economics, Pace University, U.S.A.
We examine the implications of technological change which results in large-scale capital depreciation for the macrodynamic and financial properties of a dynamic general equilibrium model. In an economy where investors fear a capital-devaluing change in technology, the introduction of the possibility of such an event helps to resolve the equity premium and risk-free rate puzzles.
Keywords: general equilibrium, asset pricing, technology shocks.
JEL Classifications:E23, E32, G12.