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HOME TO MARKET: IMPLICATIONS FOR THE CONSUMPTION TO OUTPUT RATIO

Published online by Cambridge University Press:  27 July 2017

Kellie Forrester
Kellie Forrester*
Affiliation:
California State Polytechnic University Pomona
*
Address correspondence to: Kellie Forrester, California State Polytechnic University Pomona, 3801 West Temple Ave., Pomona, CA 91768, USA; e-mail: kforrester@cpp.edu.
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Abstract

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The United States' postwar period has seen an increase in aggregate market hours worked, a decline in home production hours, and an increase in the consumption to output ratio. A multisector growth model that allows for an increase in total factor productivity in the market sector relative to the home sector can account for these phenomena. Households shift hours to the more productive market sector and purchase measured market goods in favor of unmeasured home goods. This channel accounts for a quarter of the increase in the consumption to output ratio observed in the data from 1950 to 2007.

Keywords

Structural TransformationConsumptionFemale Labor Supply

Information

Type
Articles
Information
Macroeconomic Dynamics , Volume 23 , Issue 1 , January 2019, pp. 448 - 478
Copyright
Copyright © Cambridge University Press 2017 

Footnotes

I am most grateful for the helpful comments from Peter Rupert, Espen Henriksen, Marek Kapicka, Javier Birchenall, Finn Kydland, Tom Cooley, Richard Rogerson, Carlos Zarazaga, Carlos Garriga, Ellen McGrattan, Julian Neira, Zach Bethune, and Rish Singhania. I also appreciate comments from Rachel Ngai and seminar participants at the 2013 Midwest Macroeconomics Conference at the University of Minnesota and participants at the UC Santa Barbara Macro Seminar. All errors are my own.

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