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Sectoral mark-ups in U.S. Manufacturing

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  • Puty, Cláudio Alberto Castelo Branco

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.

Suggested Citation

  • Puty, Cláudio Alberto Castelo Branco, 2018. "Sectoral mark-ups in U.S. Manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 107-125.
    • Handle: RePEc:eee:streco:v:46:y:2018:i:c:p:107-125
    DOI: 10.1016/j.strueco.2018.05.001
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    More about this item

    Keywords

    Mark-ups; Business cycles; Distribution; U.S. Manufacturing;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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