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Interpreting Procyclical Productivity: Evidence from a Cross-Nation Cross-Industry Panel

Year: 1992

Type: article

Abstract: We use an international panel data set of value added by industry to see if productivity is procyclical in response to demand shocks. It is: holding fixed our proxy for supply-side factors - the value added levels of an industry in other nations - industry-level productivity rises when value added in the rest of manufacturing rises. Moreover, increases in unemployment are associated with a lowered degree of procyclicality in Europe. This suggests that procyclical productivity arises primarily from labor hoarding by firms in the U.S. that wish to avoid future training costs and primarily from job hoarding by workers in Europe who wish to avoid unemployment.

Source: Econometric Reviews

Authors: Robert Waldmann, J. Bradford De Long

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

OpenAlex ID: W1527006159

FWCI:

Cites: 18

Cited by: 11

Related to: 10