Abstract
This paper decomposes the quarterly and annual growth rate of industrial production in two-digit manufacturing industries in seven European countries and the United States into components that are specific to industries but common to nations, components that are specific to nations but common to industries, and idiosyncratic componets. The paper shows that both industry-specific and nation-specific shocks are empirically important. Assuming that shocks to productivity vary across industries but not systematically across national boundaries for the sample countries, this result casts doubt on the hypothesis that most macroeconomic fluctuations can be ascribed to technology shocks alone.
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