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Cyclical and Competitive Influences on Pricing in Australian Manufacturing

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  • HARRY BLOCH
  • MICHAEL OLIVE

Abstract

Dynamic pricing equations are estimated using an error correction model, with data on a panel of 89 Australian manufacturing industries for the 14 years, 1971172 through 1984/85. The overall pattern is consistent with prices approximately following a fixed mark‐up rule in low concentration industries, while the mark‐up factor in high concentration industries is strongly pro‐cyclical. Also, in high concentration industries that are heavily exposed to import competition, the mark‐up factor increases with prices of foreign competing products and with the general price level for domestic manufactures.

Suggested Citation

  • Harry Bloch & Michael Olive, 1999. "Cyclical and Competitive Influences on Pricing in Australian Manufacturing," The Economic Record, The Economic Society of Australia, vol. 75(3), pages 268-279, September.
    • Handle: RePEc:bla:ecorec:v:75:y:1999:i:3:p:268-279
    DOI: 10.1111/j.1475-4932.1999.tb02455.x
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    References listed on IDEAS

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    11. Menon, Jayant, 1996. "The Degree and Determinants of Exchange Rate Pass-through: Market Structure, Non-tariff Barriers and Multinational Corporations," Economic Journal, Royal Economic Society, vol. 106(435), pages 434-444, March.
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    15. repec:bla:ecorec:v:60:y:1984:i:168:p:68-84 is not listed on IDEAS
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    Cited by:

    1. Michael Olive, 2008. "Scale economies with regard to price adjustment costs and the speed of price adjustment in Australian manufacturing," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 63-75.
    2. Baldwin, John R. Yan, Beiling, 2006. "Influences intérieures et étrangères sur les prix canadiens selon les mouvements cycliques du taux de change, 1974 à 1996," Série de documents de recherche sur l'analyse économique (AE) 2006043f, Statistics Canada, Direction des études analytiques.
    3. Harry Bloch & A. Michael Dockery & David Sapsford, 2006. "Commodity Prices and the Dynamics of Inflation in Commodity‐Exporting Nations: Evidence from Australia and Canada," The Economic Record, The Economic Society of Australia, vol. 82(s1), pages 97-109, September.
    4. Harry Bloch & Michael Olive, 2001. "Pricing over the Cycle," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(1), pages 99-108, August.
    5. Simpson, Marc W. & Ramchander, Sanjay & Chaudhry, Mukesh, 2005. "The impact of macroeconomic surprises on spot and forward foreign exchange markets," Journal of International Money and Finance, Elsevier, vol. 24(5), pages 693-718, September.
    6. Harry Bloch & Michael Olive, 2007. "The Speed and Stability of Price Adjustment in Australian Manufacturing," The Economic Record, The Economic Society of Australia, vol. 83(s1), pages 46-56, September.
    7. Baldwin, John R. & Yan, Beiling, 2008. "Domestic and foreign influences on Canadian prices," International Review of Economics & Finance, Elsevier, vol. 17(4), pages 546-557, October.
    8. Harry Bloch & Michael Olive, 2003. "Influences on Pricing and Markup in Segmented Manufacturing Markets," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 87-107, March.

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