FILE: Honda’s Asimo robot. Picture: AZAdam via Flickr/Wikimedia Commons. In the latter half of the 1980s a debate ensued between two camps of economists roughly grouped around the views of Edward Prescott, on the one hand, and Lawrence Summers, on the other.
Prescott argued that by and large, the booms and busts of the economic cycle were due to “technological shocks”; and Summers dismissed the notion as speculation not supported by evidence.
Over the years, the ‘technological shock’ model of economic shifts (TS) has surfaced over and over again in many forms, rising to the occasion whenever the debate over cycles […]