Sectoral mark-ups in U.S. Manufacturing

Structural Change and Economic Dynamics, 2018, vol. 46, issue C, 107-125

Abstract: This study investigates the mark-up on average costs in the U.S. manufacturing industry at the aggregate and two-digit industry levels. We first analyze the behavior of profit margins over seven business cycles between 1958 and 1996 and establish some stylized facts for the cyclical dynamics of mark-ups. Second, we look at the secular movements in margins of profits through a simple trend decomposition of the aggregate and two-digit mark-ups. We find that: (1) the aggregate and the majority of two-digit mark-ups behave pro-cyclically; and (2) the trend in margins of profits in the period is explained by a marked rise in the rate of surplus value and a fall in the composition of capital, indicating labor-saving/capital- using technical change.

Keywords: Mark-ups; Business cycles; Distribution; U.S. Manufacturing (search for similar items in EconPapers)
JEL-codes: D40 E12 E32 L11 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:46:y:2018:i:c:p:107-125

DOI: 10.1016/j.strueco.2018.05.001

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