The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves

Abstract

This paper contributes to the identification of the structural characteristics of the input-output accounts (IOA) behind the persistent simple behavior of relative production prices and capital intensities as an effect of changes in income distribution. These characteristics of the IOA are statistical in nature and refer to the strong proportionality between (i) the labor-coefficients vector and the Perron-Frobenius eigenvector of the input-coefficients matrix and (ii) the columns of this input matrix. Both statistical characteristics not only reduce the sources of nonlinearity in the price and capital intensity functions of the profit rate but also produce the statistical tendency of industry’s capital intensities to cluster around central values with a limited variability irrespectively of the profit rate. The empirical results are based on the U.S. economy for the period 1977-2012.