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Abstract: Existing indicators of technical change are plagued by shortcomings. I present here new measures based on books published in the field of technology that resolve many of these problems and use them to identify the impact of technology shocks on economic activity. They are positively linked to changes in R&D and scientific knowledge and capture the new technologies' commercialization dates. Changes in information technology are found to be important sources of economic fluctuations in the post-WWII period and total factor productivity, investment and, to a lesser extent, labor are all shown to increase following a positive technology shock.
Keywords: business cycles, technical change, information technologies
JEL Classification: E32, O3