Growth and Inflation: Analysis by Industry. Discussion

This paper is intended to be descriptive rather than analytical. For greater insight,a model of industrial price-output performance should be estimated, but the national accounts do not provide all the information needed for that purpose and are especially weak on capital. Much work has been done on an annual model with four equations for each industry: demand for labor as a function of real output and the relative price of labor, supply of labor as a function of the industry’s wage rate compared to the overall wage rate, demand for real output as a function of real GNP and the relative price of output, and price as a function of the wage rate and labor productivity. When the results of this effort are ready for presentation, they might provide insight into the principal findings of this paper-particularly the negative price-quantity correlation both within and across industries by distinguishing between explanatory factors peculiar to each industry (“technical change”) and more general macroeconomic influences.