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Technology and economic fluctuations in the US food sector (1958-2006): An empirical approach from a political economy perspective

By Theofanis Papageorgiou, Panayotis G. Michaelides and John G. Milios

Abstract

Purpose – The purpose of this paper is to deal with questions of instability and economic crises, deriving theoretical arguments from Marx's and Schumpeter's works and presenting relevant empirical evidence for the case of the US food manufacturing sector. Design/methodology/approach – The paper attempts to interpret the economic fluctuations in the US food sector and find causal relationships between the crucial variables dictated by Schumpeterian and Marxian theory, such as technological change, output and profitability. In this context, a number of relevant techniques have been used, such as de-trending, cointegration analysis, white noise tests, periodograms, cross-correlations and Granger causality tests. Findings – Most economic variables in the food manufacturing sector exhibit a similar pattern characterized by periodicities exhibiting a short-term cycle, a mid-term cycle and a long-term cycle. Also, the economic variables investigated follow patterns which are consistent with the total economy. Furthermore, a relatively rapid transmission of technology in the economy takes place along with bidirectional causality between technology and output/profitability, which can be interpreted as indicating an ambivalent relationship in the flow of cause and effect. These findings give credit to certain aspects of the Schumpeterian and Marxist theories of economic crises, respectively. Originality/value – This paper contributes to the literature in the following ways: first, it introduces a relevant methodological framework building on Schumpeterian and Marxist insights. Second, it uses several variables to study the economic fluctuations instead of delimiting its analysis, for instance, to industrial output. Third, the results are discussed in a broader political economy context, related to the US economy, as a whole.Economic conditions, Economic theory, Food industry, Marxist economics, Profit, United States of America

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