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Regulating rates of return do gravitate in US manufacturing!

  • Stefania Tescari

    ()

    (vvv)

  • Andrea Vaona

    ()

    (Department of Economics (University of Verona))

In this paper we test for the gravitation of regulating return rates, namely those return rates yielded by capital goods incorporating the best methods of production. We define them within a vintage capital model taking into consideration capacity utilization, capital depreciation, and wages of workers using past capital vintages. We consider two datasets regarding US manufacturing activities and we find that gravitation does take place. Our results are contrasted with those of the previous literature. Research and policy implications are discussed.

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Paper provided by University of Verona, Department of Economics in its series Working Papers with number 19/2013.

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Date of creation: Nov 2013
Date of revision:
Handle: RePEc:ver:wpaper:19/2013
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  1. Carlo Benetti & Christian Bidard & Edith Klimovsky & Antoine Rebeyrol, 2010. "Reproduction and temporary disequilibrium: a Classical approach," EconomiX Working Papers 2010-23, University of Paris West - Nanterre la Défense, EconomiX.
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  3. Reiner Franke, 2000. "Optimal Utilization of Capital and a Financial Sector in a Classical Gravitation Process," Metroeconomica, Wiley Blackwell, vol. 51(1), pages 40-66, 02.
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  5. Shaikh, Anwar, 1980. "Marxian Competition versus Perfect Competition: Further Comments on the So-Called Choice of Technique," Cambridge Journal of Economics, Oxford University Press, vol. 4(1), pages 75-83, March.
  6. Andrea Vaona, 2013. "Twenty-two econometric tests on the gravitation and convergence of industrial rates of return in New Zealand and Taiwan," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(5), pages 597-611, September.
  7. Michalis Nikiforos, 2013. "The (Normal) Rate of Capacity Utilization at the Firm Level," Metroeconomica, Wiley Blackwell, vol. 64(3), pages 513-538, 07.
  8. Pierangelo Garegnani, 2005. "Capital And Intertemporal Equilibria: A Reply To Mandler ," Metroeconomica, Wiley Blackwell, vol. 56(4), pages 411-437, November.
  9. Andrews, Donald W K, 1993. "Exactly Median-Unbiased Estimation of First Order Autoregressive/Unit Root Models," Econometrica, Econometric Society, vol. 61(1), pages 139-65, January.
  10. Fisher, Franklin M & McGowan, John J, 1983. "On the Misuse of Accounting Rates of Return to Infer Monopoly Profits," American Economic Review, American Economic Association, vol. 73(1), pages 82-97, March.
  11. Leon Podkaminer, 2010. "Real Convergence And Price Levels: Long-Term Tendencies Versus Short-Term Performance In The Enlarged European Union," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 640-664, November.
  12. Andrea Vaona, 2012. "Twenty-two econometric tests on the gravitation and convergence of industrial rates of return in New Zealand and Taiwan - extended version," Working Papers 38/2012, University of Verona, Department of Economics.
  13. Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197, June.
  14. Andrea Vaona, 2011. "Further econometric evidence on the gravitation and convergence of industrial rates of return on regulating capital," Working Papers 08/2011, University of Verona, Department of Economics.
  15. Garegnani, Pierangelo, 1979. "Notes on Consumption, Investment and Effective Demand: A Reply to Joan Robinson," Cambridge Journal of Economics, Oxford University Press, vol. 3(2), pages 181-87, June.
  16. Andrea Vaona, 2011. "An empirical investigation into the gravitation and convergence of industry return rates in OECD countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(4), pages 465-502.
  17. Tsoulfidis, Lefteris & Tsaliki, Persefoni, 2011. "Classical competition and regulating capital: theory and empirical evidence," MPRA Paper 51334, University Library of Munich, Germany, revised 2013.
  18. Graham White, 1996. "Capacity Utilization, Investment And Normal Prices: Some Issues In The Sraffa-Keynes Synthesis," Metroeconomica, Wiley Blackwell, vol. 47(3), pages 281-304, October.
  19. Glick, Mark & Ehrbar, Hans, 1988. "Profit rate equalization in the U.S. and Europe: An econometric investigation," European Journal of Political Economy, Elsevier, vol. 4(1), pages 179-201.
  20. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
  21. Lefteris Tsoulfidis & Persefoni Tsaliki, 2005. "Marxian Theory of Competition and the Concept of Regulating Capital: Evidence from Greek Manufacturing," Review of Radical Political Economics, Union for Radical Political Economics, vol. 37(1), pages 5-22, March.
  22. Glick, Mark & Ehrbar, Hans, 1990. "Long-run Equilibrium in the Empirical Study of Monopoly and Competition," Economic Inquiry, Western Economic Association International, vol. 28(1), pages 151-62, January.
  23. Robinson, Joan, 1979. "Garegnani on Effective Demand," Cambridge Journal of Economics, Oxford University Press, vol. 3(2), pages 179-80, June.
  24. Valentina Meliciani & Franco Peracchi, 2006. "Convergence in per-capita GDP across European regions: a reappraisal," Empirical Economics, Springer, vol. 31(3), pages 549-568, September.
  25. Dumenil, Gerard & Levy, Dominique, 1987. "The Dynamics of Competition: A Restoration of the Classical Analysis," Cambridge Journal of Economics, Oxford University Press, vol. 11(2), pages 133-64, June.
  26. repec:mes:postke:v:35:y:2012:i:1:p:113-136 is not listed on IDEAS
  27. repec:cup:cbooks:9780521306935 is not listed on IDEAS
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