In the Smets-Wouters DSGE Model, a Positive TFP Shock Will

question 45

True/False

In the Smets-Wouters DSGE model, a positive TFP shock will cause real GDP to rise by more than the initial shock.

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Definitions:

Late Majority

A segment of a product adoption cycle referring to individuals who adopt new technology or products after the average member of society.

Diffusion of Innovation

A theory that explains how, why, and at what rate new ideas and technology spread through cultures, from early adopters to the broader population.

Laggards

Individuals or groups that are last to adopt an innovation or change, typically resistant to alterations in status quo.

Diffusion of Innovation

A concept aiming to understand the manner, reasoning, and speed at which cultures adopt new innovations and technological advancements.