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The convergence of price-cost margins

Author

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  • Hervé Boulhol

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, IXIS-CIB - Corporate Investment Bank)

Abstract

This 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.

Suggested Citation

  • Hervé Boulhol, 2005. "The convergence of price-cost margins," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00195890, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00195890
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00195890
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    Cited by:

    1. Hervé Boulhol & Sabien Dobbelaere & Sara Maioli, 2011. "Imports as Product and Labour Market Discipline," British Journal of Industrial Relations, London School of Economics, vol. 49(2), pages 331-361, June.
    2. Cécile Denis & Kieran Mc Morrow & Werner Röger, 2006. "Globalisation : trends, issues and macro implications for the EU," European Economy - Economic Papers 2008 - 2015 254, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

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