Capital quasi-fixity and the estimation of markups
The treatment of capital costs, as either fixed or variable is a key for estimating markups. Data leans clearly towards fixity, which explains the high markups emphasized in previous studies based on Roeger's methodology. Direct estimation from the ratio of output over variable costs is preferable.
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- Hindriks, F.A. & Nieuwenhuijsen, H.R. & de Wit, G., 2000.
"Comparative Advantages in Estimating Markups,"
0003/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
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- Basu, Susanto, 1995.
"Intermediate Goods and Business Cycles: Implications for Productivity and Welfare,"
American Economic Review,
American Economic Association, vol. 85(3), pages 512-531, June.
- Basu, S., 1993. "Intermediate Goods and Business Cycles: Implications for Productivity and Welfare," Papers 93-23, Michigan - Center for Research on Economic & Social Theory.
- Susanto Basu, 1994. "Intermediate Goods and Business Cycles: Implications for Productivity and Welfare," NBER Working Papers 4817, National Bureau of Economic Research, Inc.
- Hervé Boulhol, 2005. "Pro-competitive policies and the convergence of markups," Cahiers de la Maison des Sciences Economiques bla05019, Université Panthéon-Sorbonne (Paris 1).
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