Procyclical mutifactor productivity: Tests of the current theories

A study conducts various tests of 4 hypotheses to account for procyclical multi-factor productivity. The hypotheses include imperfect competition, increasing returns to scale, labor hoarding, and thick market externalities. The test results provide strong evidence for imperfect competition and incre...

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Bibliographic Details
Published in:Journal of money, credit and banking credit and banking, 1998-02, Vol.30 (1), p.51
Main Author: Jun, Sangjoon
Format: Article
Language:English
Subjects:
Business cycles
Business services
Competition
Datasets
Economic models
Economic theory
Estimates
Hypotheses
Industrial production
Manufacturing
Monetary policy
Productivity
Ratios
Statistical analysis
Studies
Value added
Variables
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Summary:A study conducts various tests of 4 hypotheses to account for procyclical multi-factor productivity. The hypotheses include imperfect competition, increasing returns to scale, labor hoarding, and thick market externalities. The test results provide strong evidence for imperfect competition and increasing returns, and weak evidence for labor hoarding and thick market externalities. However, the markup and returns-to-scale parameter estimates are much smaller than those noted in previous research. This difference results from the use of gross output and intermediate inputs as opposed to the use in previous research of value added and primary inputs.
ISSN:0022-2879
1538-4616