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The Interaction Between Business Cycles and Productivity Growth: Evidence from US Industrial Data

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  • Jim Malley
  • Anton Muscatelli
  • Ulrich Woitek

Abstract

In this paper, we employ total factor productivity data adjusted for factor utilisation over the cycle, to model the dynamic interaction between TFP and employment. Our data spans twenty 2-digit SIC code manufacturing sectors in the US. There are two key results. First, we show that the impact of technology shocks on employment cycles is much weaker than suggested by real business cycle-type models, and that in a number of cases employment responds negatively to technology shocks. Second, in examining the impact of demand shocks on TFP, we find some evidence for both opportunity cost and learning-by-doing effects.

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Bibliographic Info

Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 9805.

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Date of creation: Mar 1998
Date of revision: Oct 1998
Handle: RePEc:gla:glaewp:9805

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Postal: Adam Smith Building, Glasgow G12 8RT
Phone: 0141 330 4618
Fax: 0141 330 4940
Web page: http://www.gla.ac.uk/schools/business/research/
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  1. Basu, Susanto, 1996. "Procyclical Productivity: Increasing Returns or Cyclical Utilization?," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 719-51, August.
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Citations

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Cited by:
  1. Miguel Jimenez & Domenico J. Marchetti, 2000. "Interpreting the Procyclical Productivity of Manufacturing Sectors: Can We Really Rule Out External Effects:," Econometric Society World Congress 2000 Contributed Papers 1319, Econometric Society.
  2. Jim Malley & Anton Muscatelli & Ulrich Woitek, 1999. "Real Business Cycles or Sticky Prices? The Impact of Technology Shocks on US Manufacturing," Working Papers 1999_15, Business School - Economics, University of Glasgow.
  3. Jim Malley & Anton Muscatelli & Ulrich Woitek, 2000. "New International Comparisons Of Productivity Performance: A Sectoral Analysis And A Comparison Of Uk Performance," Working Papers 2000_17, Business School - Economics, University of Glasgow.
  4. Thorsten Proettel & Jochen Streb & Sabine Streb, 2009. "Die Produktivitätsentwicklung in der deutschen Stromwirtschaft in langfristiger Perspektive," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(3), pages 309-332, 08.
  5. Malley, James R. & Muscatelli, V. Anton & Woitek, Ulrich, 2005. "Real business cycles, sticky wages or sticky prices? The impact of technology shocks on US manufacturing," European Economic Review, Elsevier, vol. 49(3), pages 745-760, April.

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