The convergence of price-cost margins
AbstractThis paper gives estimates of sectoral markup trends in thirteen OECD countries over the last three decades. It concludes with a slight, albeit heterogeneous, increase in price-cost margins (PCMs) overall, contrary to the generally expected effect of increased competition. More strikingly, it estabishes a clear pattern of PCM convergence both across countries and sectors. This convergence means that high margins have shrunk and low margins grown. These movements seem to be linked to the decline in the labour share. They point to a need to search for factors counterbalancing the pro-competitive effect on markups.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00195890.
Date of creation: Sep 2005
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Markup; price-cost margin; pro-competitive effect; wage bargaining; labour share.;
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- C�cile Denis & Kieran Mc Morrow & Werner R�ger, 2006. "Globalisation : trends, issues and macro implications for the EU," European Economy - Economic Papers 254, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
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