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The business cycle, market structure and mark-ups: an Indian case study

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  • Satish Chand
  • Kunal Sen

Abstract

The new industrial organization theories as applied to macroeconomics predict that the relationship between the business cycle and profit mark-up is mediated by market structure. This prediction is tested using panel data on Indian manufacturing and evidence is found to support the above proposition. In particular, it is found that mark-ups are more counter-cyclical in concentrated industries.

Suggested Citation

  • Satish Chand & Kunal Sen, 2000. "The business cycle, market structure and mark-ups: an Indian case study," Applied Economics Letters, Taylor & Francis Journals, vol. 7(4), pages 251-254.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:4:p:251-254
    DOI: 10.1080/135048500351618
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    References listed on IDEAS

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    1. Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Business Cycles and the Relationship Between Concentration and Price-Cost Margins," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 1-17, Spring.
    2. Balakrishnan, Pulapre, 1991. "Industrial price behaviour in India : An 'error-correction' model," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 309-326, November.
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    4. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
    5. Caves, Richard E., 1985. "International trade and industrial organization: Problems, solved and unsolved," European Economic Review, Elsevier, vol. 28(3), pages 377-395, August.
    6. Robert E. Hall, 1986. "Market Structure and Macroeconomic Fluctuations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 285-338.
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    Cited by:

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    3. Vaona, Andrea, 2010. "A nonparametric panel data approach to the cyclical dynamics of price-cost margins," Kiel Working Papers 1580, Kiel Institute for the World Economy (IfW Kiel).

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