The Microeconomics of Macroeconomic Asymmetries: Sectoral Driving Forces and Firm Level Characteristics

Oleg Korenok (), Bruce Mizrach () and Stanislav I. Radchenko ()

Departmental Working Papers from Rutgers University, Department of Economics

Abstract: There is now considerable evidence that business cycle variation in output and employment in the U.S. differs 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%.

Keywords: asymmetry; Markov switching; leading indicators; industry; NA (search for similar items in EconPapers)
JEL-codes: E23 E24 E32 (search for similar items in EconPapers)
Date: Written
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Related works:
Working Paper: The Microeconomics of Macroeconomic Asymmetries: Sectoral Driving Forces and Firm Level Characteristics (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:rut:rutres:200405

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