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Prices, Margins and Liquidity Constraints: Swedish Newspapers 1990-1996

Author

Listed:
  • Asplund, Marcus

    () (Department of Economics, London Business School)

  • Eriksson, Rickard

    (Dept. of Economics, Stockholm School of Economics)

  • Strand, Niklas

    (Dept. of Economics, Stockholm School of Economics)

Abstract

For Swedish newspaper firms, a market with high switching costs, the subscription market, and a market with low switching costs, the advertising market, are of approximately equal importance. When Sweden enters a deep recession, we find that liquidity constraints influence the pricing decision in the former, but not the latter market. This gives support to theories stressing the magnifying effect of liquidity constraints on the business cycle.

Suggested Citation

  • Asplund, Marcus & Eriksson, Rickard & Strand, Niklas, 2001. "Prices, Margins and Liquidity Constraints: Swedish Newspapers 1990-1996," SSE/EFI Working Paper Series in Economics and Finance 470, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0470
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    References listed on IDEAS

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    Cited by:

    1. Simon Gilchrist & Raphael Schoenle & Jae Sim & Egon Zakrajšek, 2017. "Inflation Dynamics during the Financial Crisis," American Economic Review, American Economic Association, vol. 107(3), pages 785-823, March.

    More about this item

    Keywords

    Liquidity constraints; switching costs; price adjustment; newspaper industry;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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