AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Markups and the Manufacturing Productivity Slowdown
AEA Papers and Proceedings
(pp. 457–461)
Abstract
This paper examines whether mismeasurement due to markups is responsible for the decline in US manufacturing productivity growth. It estimates markups using a model to estimate the user cost of capital to split capital payments into regular returns and economic profit. I do not find that the slowdown is due to mismeasurement. Correcting for markups tends to strengthen the slowdown. Labor input growth has been faster than output growth. The markup correction increases the impact of labor changes. The results are consistent with the slowdown resulting from slower technical change in investment products.Citation
Bridgman, Benjamin. 2026. "Markups and the Manufacturing Productivity Slowdown." AEA Papers and Proceedings 116: 457–461. DOI: 10.1257/pandp.20261043Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- L25 Firm Performance: Size, Diversification, and Scope
- L60 Industry Studies: Manufacturing: General