Long-term Inflationary Services and the Problem of Sectorial Measurement in National Accounts: An Analysis of the American Case
Presented at the UNCTAD Global Services Forum / REDLAS Conference 2018, Buenos Aires, September 14, 2018
23 Pages Posted: 9 Oct 2018
Date Written: September 15, 2018
Deindustrialization is on the spot, again. The anachronism between the real economy and the way SNA accounts manufacturing and services has led economic research to render a new world with old premises. This paper aims to review statistical data upon its factual structure and to answer the following question: Did the manufacturing sector indeed lose room for the services sector? We offer evidence that the so-called American deindustrialization is, at least in part, a result of relative prices dynamics underneath manufacturing and services progress over time. We also find evidence that the deflationary pattern of the manufacturing sector does not necessarily imply a less relevant role in the economy. Ricardo's pricing theory, the Kaldor-Verdoorn's Law, Baumol's Disease and the symbiotic and synergetic relationship between manufacturing and services help explain that price dynamics.
Keywords: services, manufacturing, productivity, measurement, inflation, costs, technology
JEL Classification: O14, L6, L8, L16, D2, D4
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