The Time Structure of Production in the US, 2002-2009

31 Pages Posted: 24 May 2011

See all articles by Andrew T. Young

Andrew T. Young

Texas Tech University - Rawls College of Business

Date Written: May 22, 2011

Abstract

The US time structure of production during the 2002 through 2009 business cycle is characterized empirically using industry-level input-output data. An industry’s total industry output requirement (TIOR) is proposed as a metric for "roundaboutness". I find that the time structure of production lengthened following the Federal Reserve’s 2002 expansionary deviation from the Taylor rule and then contracted during the Great Recession. Value added growth in the most-roundabout of US industries accelerated relative to that of the least-roundabout industries. Heading into the Great Recession, value-added growth in the most-roundabout industries contracted early and turned negative in 2007 while value-added growth in the least-roundabout industries remained positive until 2009. The stylized facts of the time structure of production are consistent with Austrian Business Cycle Theory.

Keywords: Austrian business cycle theory, input-output analysis, time structure of production, capital structure, roundabout methods of production

JEL Classification: E32, E43, E51, E52, E60, B53

Suggested Citation

Young, Andrew T., The Time Structure of Production in the US, 2002-2009 (May 22, 2011). Available at SSRN: https://ssrn.com/abstract=1849945 or http://dx.doi.org/10.2139/ssrn.1849945

Andrew T. Young (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

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