Abstract
This paper investigates the source of historical fluctuations in annual US and UK data extending back to the 19 th century. Long-run identifying restrictions are used to decompose shocks into technology shocks and other shocks. For the US data, a variety of models with differing auxiliary assumptions are investigated. In the US, the impact of technology shocks on labor input in the preWWII period is the opposite of its impact in the post-WWII period in most models. The UK data shows more sample stability, with the short-run impact of technology on labor being negative. The decomposition also reveals important changes in the volatility of shocks over time.
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