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Competition, the Lisbon Strategy and the Euro

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Author Info
Anindya Banerjee
Bill Russell

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Abstract

This paper considers whether the Euro-area economies have become more competitive since the introduction of the Euro and the implementation of the Lisbon strategy. Using a measure of the markup as a proxy for competition we show that while the markup has varied considerably over the past 25 years and declined recently, most of this variation can be explained by movements in inflation and the business cycle. Consequently, based on our data, we find little evidence of a pro-competitive impact of the introduction of the Euro and implementation of the Lisbon strategy.

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Paper provided by European University Institute in its series Economics Working Papers with number ECO2004/32.

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Date of creation: 2004
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Handle: RePEc:eui:euiwps:eco2004/32

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Related research
Keywords: Inflation; markup; business cycle; competition; Lisbon strategy; Euro;

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation and Testing
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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    Other versions:
  2. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-66, September. [Downloadable!] (restricted)
  3. Diamond, Peter A, 1993. "Search, Sticky Prices, and Inflation," Review of Economic Studies, Blackwell Publishing, vol. 60(1), pages 53-68, January. [Downloadable!] (restricted)
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  4. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-34, June.
  5. Nicoletta Batini & Brian Jackson & Stephen Nickell, 2000. "Inflation Dynamics and the Labour Share in the UK," Discussion Papers 02, Monetary Policy Committee Unit, Bank of England. [Downloadable!]
  6. Benabou, Roland, 1992. "Inflation and markups : Theories and evidence from the retail trade sector," European Economic Review, Elsevier, vol. 36(2-3), pages 566-574, April. [Downloadable!] (restricted)
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  7. Franz, Wolfgang & Gordon, Robert J, 1993. "German and American Wage and Price Dynamics: Differences and Common Themes," CEPR Discussion Papers 777, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  8. Konieczny, Jerzy D, 1990. "Inflation, Output and Labour Productivity When Prices Are Changed Infrequently," Economica, London School of Economics and Political Science, vol. 57(226), pages 201-18, May. [Downloadable!] (restricted)
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  12. Banerjee, Anindya & Russell, Bill, 2001. "Industry Structure and the Dynamics of Price Adjustment," Applied Economics, Taylor and Francis Journals, vol. 33(15), pages 1889-1901, December. [Downloadable!] (restricted)
  13. Rotemberg, Julio J & Woodford, Michael, 1992. "Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1153-1207, December. [Downloadable!] (restricted)
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  14. Basu, Susanto, 2000. "Understanding how price responds to costs and production: A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 79-85, June. [Downloadable!] (restricted)
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