Abstract
Twenty years of monthly production data for 11 manufacturing
industries in 19 countries are studied. Using the fact that in some
countries production virtually shuts down for one summer month,
together with the differences in the timing of aggregate cyclical
fluctuations, information is provided on the cost structure of
different industries. A number of previously documented patterns can be
confirmed. In particular, a tremendous amount of volatility in
production is accounted for by seasonal shifts, but the seasonal shifts
are not very highly correlated across countries. There are also
considerable differences in the timing and magnitude of business cycles
across countries. Lastly, the country-level differences in seasonality
are larger that the industry-level patterns in seasonality. In addition
to these basic observations, a number of new results describing how
seasonal production patterns vary over the course of the business cycle
are provided. With the exception of textiles, and to a lesser extent
transportation equipment and chemicals, the seasonal cycle in
production is significantly less volatile during a business cycle boom
than it is during a business cycle contraction. For one-third of the 19
countries in our sample, there are significant cyclical/seasonal
interactions common to all industries within the country. In relative
terms, the estimated interactions that are common to countries are
larger than the interactions that are common to industries. This is in
line with the finding that the overall variation in production differs
more across countries that it does across industries. Finally, the
reallocation of production from high output months to low output months
that typically occurs in moving from a business cycle through to peak
is sometimes quite large.