The Long-Run Relationship Between Inflation and the Markup in the U.S
AbstractThis paper examines the long-run relationship between inflation and a new measure of the price-marginal cost markup. This new markup index is derived while accounting for labor adjustment costs, which a large number of the papers that estimate the markup have ignored. We then examine the long-run relationship between this markup measure, which is estimated using U.S. manufacturing data, and inflation. We find that decreases in the markup that are associated with a percentage point increase in inflation are much smaller than previous studies have found.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 31 (2011)
Issue (Month): 1 ()
Contact details of provider:
Markup; Inflation; Marginal Cost.;
Find related papers by JEL classification:
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- D4 - Microeconomics - - Market Structure and Pricing
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