We study twenty years of monthly production data for 11 manufacturing industries in 19 countries. Using the fact that in some countries production virtually shuts down for one summer month, together with the differences in the timing of aggregate cyclical fluctuations, we are able to learn about the cost structure of different industries. Our primary finding is that during a boom year summer shut-downs are shorter. Rather than increasing production further during the rest of the year, producers reallocate activity from high output months to low output months. We also find that there are important seasonal/cyclical interactions common to all industries within a given country, and that these countries effects are larger than the pure industry effects. The correlation of the cross-country differences with measures of taxation and labor market structure suggests the possibility that differences in the willingness (and ability) to substitute labor intertemporally are responsible for the variation.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5310.
Length: Date of creation: Nov 1996 Date of revision: Handle: RePEc:nbr:nberwo:5310
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Find related papers by JEL classification: E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995.
"Capital Utilization and Returns to Scale,"
NBER Chapters,
in: NBER Macroeconomics Annual 1995, Volume 10, pages 67-124
National Bureau of Economic Research, Inc.
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