Autore
Marchetti, Domenico J.

Titolo
Procyclical productivity, externalities and labor hoarding: a re-examination of evidence from U.S. manufacturing
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1994 - Fascicolo: 13 - Pagina iniziale: 1 - Pagina finale: 34

This paper argues that the widely-cited evidence provided by Caballero and Lyons (1992) on externalities in U.S. manufacturing is due to model misspecification. In fact, if the more appropriate gross output framework replaces the value added one, and standard proxies for labor effort are included into the model, the external effects practically disappear. Such results are shown to be robust to the choice of effort proxy and estimation method. On the other hand, labor effort effects are found to be highly significant and relatively large, in all regressions. These findings reconfirm the validity of the traditional labor hoarding theory of procyclical productivity vis-à-vis recent alternative explanations, based on increasing returns due to external effects.



Testo completo: http://hdl.handle.net/1814/493

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