Abstract
In this paper we highlight a new dimension of the aggregate procyclical productivity phenomenon. We show that estimates of the degree of returns to scale are larger for manufacturing as a whole than for two-digit industries. Since this difference must be due to factors that are only internalized at the most aggregate level, we term it an external effect. This result rules out explanations based on own-input variation —such as true increasing returns and unmeasured factor utilization tied to own-activity —as the sole explanations for aggregate procyclical productivity. We explore several potential explanations of this external effect.
Keywords
EconomicsProductivityReturns to scaleAggregate (composite)EconometricsMonetary economicsDimension (graph theory)Total factor productivityPhenomenonLabour economicsProduction (economics)MicroeconomicsMacroeconomicsMathematics
Affiliated Institutions
Related Publications
Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries
This paper presents estimates of the productivity and factor bias effects of interindustry R&D spillovers for five high-tech industries. Each industry is distinguished as a sepa...
Trade Unions in the Production Process
In order to estimate the effects of unions on worker productivity, a Cobb-Douglas production function is modified so that unionization is included as a variable. The resulting f...
Computing Inequality: Have Computers Changed the Labor Market?
This paper examines the effect of skill-biased technological change as measured by computerization on the recent widening of U. S. educational wage differentials. An analysis of...
Automation and New Tasks: How Technology Displaces and Reinstates Labor
We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment ove...
Technical Change, Inequality, and the Labor Market
This essay discusses the effect of technical change on wage inequality. I argue that the behavior of wages and returns to schooling indicates that technical change has been skil...
Publication Info
- Year
- 1992
- Type
- article
- Volume
- 29
- Issue
- 2
- Pages
- 209-225
- Citations
- 294
- Access
- Closed
External Links
Social Impact
Altmetric
PlumX Metrics
Social media, news, blog, policy document mentions
Citation Metrics
294
OpenAlex
Cite This
Ricardo J. Caballero,
Richard K. Lyons
(1992).
External effects in U.S. procyclical productivity.
Journal of Monetary Economics
, 29
(2)
, 209-225.
https://doi.org/10.1016/0304-3932(92)90013-r
Identifiers
- DOI
- 10.1016/0304-3932(92)90013-r