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Title:The Microeconomics of Macroeconomic Asymmetries : Sectoral Driving Forces and Firm Level Characteristics PDF Logo
Authors:Korenok, Oleg
Mizrach, Bruce
Radchenko, Stanislav
Issue Date:2004
Series/Report no.:Working papers / Rutgers University, Department of Economics 2004,05
Abstract:There is now considerable evidence that business cycle variation in output and employment in the U.S. di¤ers in expansions and contractions. We present nonparametric evidence that asymmetries are strongest in durable goods manufacturing. In a Markov switching framework, we find two leading indicators, consumer expectations and the term spread, act as important driving forces behind asymmetry. Cross sectional analysis, using firm level data, shows that plant and equipment expenditures, raw materials inventory holdings, and bankruptcy score increase the likelihood ratio index for asymmetry by more than 65%.
Subjects:asymmetry
industry
triples test
Markov switching
oil prices
inventories
leading indicators
JEL:E32
E24
E23
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, Rutgers University

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