Using the Cointegrated VAR framework, we provide evidence for the US manufacturing sector that the principle of effective demand in a growth context, by which a permanent demand shock has a permanent growth effect, is consistent with the stylized fact of a stationary rate of capacity...

One of the main shortcomings of the profit persistence literature is the fact that it looks only at surviving companies. This paper uses a unique dataset to analyse profit persistence in two different samples of stationary series: 85 surviving US companies from 1950–1999 and 72 exiters. While...