The Markup and the Business Cycle Reconsidered
AbstractA fresh interpretaion is provided of the influential finding that the markup of prices over marginal costs is counter-cyclical. Using Rotemberg and Woodford's data set we argue that the markup is best modelled as a variable that is integrated of order one. A consequence of this finding is that the markup cannot be related in the long run with business-cycle variables since these are traditionally thought of as being stationary.
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Bibliographic InfoPaper provided by European University Institute in its series Economics Working Papers with number eco2000/21.
Length: 27 pages
Date of creation: 2000
Date of revision:
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INFLATION ; PRICES ; PRODUCTIVITY;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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- Banerjee, A. & Russell, B., 2000.
"Industry Structure and the Dynamics of Price Adjustment,"
Economics Working Papers
eco2000/22, European University Institute.
- Anindya Banerjee, 2001. "Industry structure and the dynamics of price adjustment," Applied Economics, Taylor & Francis Journals, vol. 33(15), pages 1889-1901.
- Anindya Banerjee & Bill Russell, 2000. "Industry Structure and the Dynamics of Price Adjstment," Dundee Discussion Papers in Economics 121, Economic Studies, University of Dundee.
- Banerjee, Anindya & Russell, Bill, 2005.
"Inflation and measures of the markup,"
Journal of Macroeconomics,
Elsevier, vol. 27(2), pages 289-306, June.
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