Autori
Marchetti, Domenico J.
Jimenez, Miguel

Titolo
Thick-market externalities in U.S. manufacturing: a dynamic study with panel data
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1995 - Fascicolo: 14 - Pagina iniziale: 1 - Pagina finale: 30

This paper investigates the effect of the business cycle on productivity. We apply a VAR m ethodology to a panel data set of 402 four-digit U.S. manufacturing industries. In order to distinguish between (i) effort variation effects and (ii) thick-market effects a la Diamond (1982) and other "true" productive externalities, if any, we simulate a permanent demand-induced increase of aggregate econom ic activity, and analyze the dynamic response of sectoral productivity. Our results support the existence of supply-side externalities, and therefore point to them as a potential source of social increasing returns and multiple equilibria. In addition, unlike some recent papers by Gali and Hammour (1993) and SaintPaul (1993), we find no evidence of negative long-run effects of expansions on productivity.



Testo completo: http://hdl.handle.net/1814/539

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