Given a production function as
Blockquote Y(t) = A(t) N(t)
A(t) is the shock related to technology
Can I define the above technology shock as the stationary shock? In paticular,
a(t)= log(A(t)) and a(t) =R_(a)*a(t-1) + phi_(t)
Why not? That way, A_t has mean 1