IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/v99y1991i3p439-59.html
   My bibliography  Save this article

Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries

Author

Listed:
  • Bernanke, Ben S
  • Parkinson, Martin L

Abstract

The authors study the phenomenon of short-run increasing returns to labor (SRIRL) in a sample of ten interwar U.S. manufacturing industries. Their authors main findings are that SRIRL was common in the interwar period and that the pattern of SRIRL across industries was similar to that observed in the postwar period. The authors argue that, since presumably the Depression was not caused by technical regress, these findings are inconsistent with the claim of real business cycle theorists that SRIRL are, in general, due to procyclical technological shocks. They propose tests for discriminating between two other leading explanations of SRIRL, but find that their conclusions differ by industry. Copyright 1991 by University of Chicago Press.

Suggested Citation

  • Bernanke, Ben S & Parkinson, Martin L, 1991. "Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 439-459, June.
    • Handle: RePEc:ucp:jpolec:v:99:y:1991:i:3:p:439-59
    DOI: 10.1086/261761
    as

    Download full text from publisher

    File URL: https://dx.doi.org/10.1086/261761
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See https://www.journals.uchicago.edu/JPE for details.
    File URL: https://libkey.io/10.1086/261761?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert S. Chirinko, 1993. "Non-convexities, labor hoarding, technology shocks, and procyclical productivity: a structural econometric approach," Research Working Paper 93-08, Federal Reserve Bank of Kansas City.
    2. Hunter, Helen Manning, 1982. "The Role of Business Liquidity During the Great Depression and Afterwards: Differences Between Large and Small Firms," The Journal of Economic History, Cambridge University Press, vol. 42(4), pages 883-902, December.
    3. Fay, Jon A & Medoff, James L, 1985. "Labor and Output over the Business Cycle: Some Direct Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 638-655, September.
    4. Thor Hultgren, 1960. "Appendices to "Changes in Labor Cost During Cycles in Production and Business"," NBER Chapters, in: Changes in Labor Cost during Cycles in Production and Business, pages 79-85, National Bureau of Economic Research, Inc.
    5. Christopher A. Sims, 1974. "Output and Labor Input in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(3), pages 695-736.
    6. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    7. Julio J. Rotemberg & Lawrence H. Summers, 1988. "Labor Hoarding, Inflexible Prices, and Procyclical Productivity," NBER Working Papers 2591, National Bureau of Economic Research, Inc.
    8. Ricardo J. Caballero & Richard K. Lyons, 1989. "The Role of External Economies in U.S. Manufacturing," NBER Working Papers 3033, National Bureau of Economic Research, Inc.
    9. Wooldridge, Jeffrey M., 1989. "A computationally simple heteroskedasticity and serial correlation robust standard error for the linear regression model," Economics Letters, Elsevier, vol. 31(3), pages 239-243, December.
    10. Thor Hultgren, 1960. "Changes in Labor Cost during Cycles in Production and Business," NBER Books, National Bureau of Economic Research, Inc, number hult60-1.
    11. F. P. R. Brechling, 1965. "The Relationship between Output and Employment in British Manufacturing Industries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 187-216.
    12. Daniel Creamer & Sergei Dobrovolsky & Israel Borenstein, 1960. "Capital in Manufacturing and Mining: Its Formation and Financing," NBER Books, National Bureau of Economic Research, Inc, number crea60-1.
    13. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1989. "Building Blocks of Market Clearing Business Cycle Models," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 247-302, National Bureau of Economic Research, Inc.
    14. R. J. Ball & E. B. A. St Cyr, 1966. "Short Term Employment Functions in British Manufacturing Industry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 33(3), pages 179-207.
    15. King, Robert G & Plosser, Charles I, 1984. "Money, Credit, and Prices in a Real Business Cycle," American Economic Review, American Economic Association, vol. 74(3), pages 363-380, June.
    16. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ben S. Bernanke & James Powell, 1986. "The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Prewar and Postwar Eras," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 583-638, National Bureau of Economic Research, Inc.
    2. J. Bradford De Long, 1990. "Interpreting Procyclical Productivity Movements: Evidence from a Cross-Nation Cross-Industry Panel," J. Bradford De Long's Working Papers _136, University of California at Berkeley, Economics Department.
    3. Riefers, Rudolf, 1969. "Kurzfristige Beschäftigungsfunktionen : ein Literaturüberblick," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 2(9), pages 698-712.
    4. J. Bradford DeLong & Robert J. Waldmann, 1997. "Interpreting procyclical productivity: evidence from a cross-nation cross-industry panel," Economic Review, Federal Reserve Bank of San Francisco, pages 33-52.
    5. Ismihan, Mustafa, 2010. "A New Framework for Output-Unemployment Relationship: Okun’s Law Revisited," MPRA Paper 28135, University Library of Munich, Germany.
    6. Miguel Jimenez & Domenico J. Marchetti, 2000. "Interpreting the Procyclical Productivity of Manufacturing Sectors: Can We Really Rule Out External Effects:," Econometric Society World Congress 2000 Contributed Papers 1319, Econometric Society.
    7. Robert J. Gordon, 2000. "Does the "New Economy" Measure Up to the Great Inventions of the Past?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 49-74, Fall.
    8. Simon Cueva & Éric Heyer, 1997. "Fonction de production et degrés d'utilisation du capital et du travail : une analyse économétrique," Économie et Prévision, Programme National Persée, vol. 131(5), pages 93-111.
    9. Andrew E. Evans, 2020. "Average labour productivity dynamics over the business cycle," Empirical Economics, Springer, vol. 59(4), pages 1833-1863, October.
    10. Beaulieu, J. Joseph & Miron, Jeffrey A., 1991. "The seasonal cycle in U.S. manufacturing," Economics Letters, Elsevier, vol. 37(2), pages 115-118, October.
    11. John G. Fernald & J. Christina Wang, 2016. "Why Has the Cyclicality of Productivity Changed? What Does It Mean?," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 465-496, October.
    12. Yongkyun Chung, 1997. "Labor Hoarding and SRIRL Pardox: Some Evidences from United Kingdom and United States," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 1(1), pages 175-189, December.
    13. Robert A Hart, 2022. "Labour productivity during the Great Depression and the Great Recession in UK engineering and metal manufacture [The Productivity Puzzle: a Firm-level Investigation into Employment Behaviour and Re," Oxford Economic Papers, Oxford University Press, vol. 74(2), pages 431-452.
    14. Robert Dixon & John Freebairn, 2007. "Hours of Work: A Demand Perspective," Department of Economics - Working Papers Series 1022, The University of Melbourne.
    15. Antonio M. Conti & Elisa Guglielminetti & Marianna Riggi, 2019. "Labour productivity and the wageless recovery," Temi di discussione (Economic working papers) 1257, Bank of Italy, Economic Research and International Relations Area.
    16. Victor Zarnowitz, 1989. "Cost and Price Movements in Business Cycle Theories and Experience: Hypotheses of Sticky Wages and Prices (SEE ALSO WP3132-send out together)," NBER Working Papers 3131, National Bureau of Economic Research, Inc.
    17. Kawai, Eizo, 2001. "Re-examination of wage, employment, and hours adjustments: what is crucial for differences in the adjustments?," Japan and the World Economy, Elsevier, vol. 13(4), pages 483-497, December.
    18. Jordi Galí & Thijs van Rens, 2021. "The Vanishing Procyclicality of Labour Productivity [Why have business cycle fluctuations become less volatile?]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 302-326.
    19. Rabeau, Yves, 1976. "La prévision de l’emploi dans le modèle de l’IRIC," L'Actualité Economique, Société Canadienne de Science Economique, vol. 52(2), pages 149-168, avril.
    20. Daehaeng Kim & Chul-In Lee, 2007. "On-the-Job Human Capital Accumulation in a Real Business Cycle Model: Implications for Intertemporal Substitution Elasticity and Labor Hoarding," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 494-518, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:99:y:1991:i:3:p:439-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.