{"title":"Induced innovation, the distributive cycle, and the changing pattern of labour productivity cyclicality: an SVAR analysis for the US economy","authors":"Marco Stamegna","doi":"10.1007/s40888-024-00340-3","DOIUrl":null,"url":null,"abstract":"<p>This paper aims to: a) contribute to the empirical literature on induced technical change by investigating the wage-productivity nexus at business cycle frequencies in the US economy; b) explore the changing pattern of the distributive cycle in the US. In order to do so, it carries out the estimation of several structural vector autoregressive (SVAR) models for two subperiods: the post-war period (1948–1984) and the Great Moderation (1985–2019). We find that: i) wage shocks have positive effects on labour productivity at business cycle frequencies in both subperiods; ii) the US economy exhibits profit-led activity, although this appears to be driven more by technology than by distributive shocks; iii) during the Great Moderation, labour productivity has become acyclical, and real wages are no longer responsive to employment; the disappearance of the procyclical pattern of labour productivity can then be explained by a lessened incentive to invest in labour-saving innovations by firms due to missing wage growth in the upturn of the business cycle.</p>","PeriodicalId":44858,"journal":{"name":"Economia Politica","volume":"8 1","pages":""},"PeriodicalIF":2.8000,"publicationDate":"2024-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economia Politica","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s40888-024-00340-3","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This paper aims to: a) contribute to the empirical literature on induced technical change by investigating the wage-productivity nexus at business cycle frequencies in the US economy; b) explore the changing pattern of the distributive cycle in the US. In order to do so, it carries out the estimation of several structural vector autoregressive (SVAR) models for two subperiods: the post-war period (1948–1984) and the Great Moderation (1985–2019). We find that: i) wage shocks have positive effects on labour productivity at business cycle frequencies in both subperiods; ii) the US economy exhibits profit-led activity, although this appears to be driven more by technology than by distributive shocks; iii) during the Great Moderation, labour productivity has become acyclical, and real wages are no longer responsive to employment; the disappearance of the procyclical pattern of labour productivity can then be explained by a lessened incentive to invest in labour-saving innovations by firms due to missing wage growth in the upturn of the business cycle.
期刊介绍：
This journal publishes peer-reviewed articles that link theory and analysis in political economy, promoting a deeper understanding of economic realities and more effective courses of policy action. Established in 1984, the journal has kept pace with the times in disseminating high-quality and influential research aimed at establishing fruitful links between theories, approaches and institutions. With this relaunch (which combines Springer’s worldwide scientific scope with the Italian cultural roots of il Mulino and Fondazione Edison, whose research has been published by the two mentioned publishers for many years), the journal further reinforces its position in the European and international economic debate and scientific community. Furthermore, this move increases its pluralistic attention to the role that – at the micro, sectoral, and macro level – institutions and innovation play in the unfolding of economic change at different stages of development.
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