Procyclical Labour Productivity: A Closer Look at a Stylized Fact
At 4-digit United States manufacturing industry level, we find evidence suggesting that the stylized fact of procyclical labour productivity should be treated with great caution. We use the NBER Manufacturing Productivity database to investigate the relationship between hourly labour productivity and real output for 450 industries for the years 1958-91. Labour productivity is significantly procyclical in 63% of industries and acyclical in 36%. In the latter respect, a high proportion of investment goods industries display acyclical productivity. Cross-section regressions are carried out that seek to explain the interindustry distribution of cyclicality. The analysis attributes a significant role to variations in materials costs, as a proxy for fluctuations in factor utilization. Copyright 1999 by The London School of Economics and Political Science
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Volume (Year): 66 (1999)
Issue (Month): 264 (November)
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