Inflation and real sectoral output shares: Dynamic panel model evidence from seven OECD countries

► We investigate the potential effects of inflation on the composition of output. ► Our data includes nine sectors for seven OECD countries from 1970-2005. ► We use panel data methods including panel VAR's. ► We find that shares of construction and manufacturing fall, but mining's rises. ► Effects on manufacturing and mining, but not construction, are long lived.