The Rise and Fall of Unproductive Activities in the US Economy 1964-2015: Facts, Theory and Empirical Evidence

Tsoulfidis, Lefteris and Tsimis, Achilleas and Paitaridis, Dimitris (2018): The Rise and Fall of Unproductive Activities in the US Economy 1964-2015: Facts, Theory and Empirical Evidence.

Abstract

The general idea about unproductive labour and the associated with it activities is that they tend to expand and by expanding reduce the investible product and the growth potential of the economy, however little is known about the determinants of their movement. In this study, we take a closer look at the US unproductive labour and activities in general during the long enough 1964-2015 period. As possible determinants of the movement of unproductive activities we consider the economy-wide average rate of profit, the real interest rate and the degree of capacity utilization. The Toda Yamamoto causality tests, as well as the ARDL econometric model, lend support to the view that the unproductive expenditures and activities are determined rather than determine the above variables. Furthermore, the error correction term indicates that a long-run equilibrium relationship exists and it is attainable after the passage of not too long time.

• Item Type: MPRA Paper
• Language: English
• Keywords: Unproductive expenditures, rate of profit, Great recession, ARDL
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B13 - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School); B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B14 - Socialist ; Marxist; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B19 - Other; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; D - Microeconomics > D3 - Distribution > D33 - Factor Income Distribution; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N12 - U.S. ; Canada: 1913-; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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