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A nonparametric panel data approach to the cyclical dynamics of price-cost margins

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  • Vaona, Andrea

Abstract

By using nonparametric and panel data econometrics, this paper re-assesses the effect of both the current level of economic activity and of future expected demand on the dynamics of the price mark-up over marginal cost in US manufacturing industries from 1958 to 1996. Consistently with previous results, the current level of economic activity has a negative impact on the mark-up and expectations of future demand a positive one. Differences between consumer and producer goods and between more and less competitive sectors play a minor role. Differences between durable and nondurable goods, instead, find more empirical support.

Suggested Citation

  • Vaona, Andrea, 2010. "A nonparametric panel data approach to the cyclical dynamics of price-cost margins," Kiel Working Papers 1580, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:1580
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    File URL: https://www.econstor.eu/bitstream/10419/30036/1/618603727.pdf
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    References listed on IDEAS

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    Cited by:

    1. Mark Bils & Peter J. Klenow & Benjamin A. Malin, 2014. "Resurrecting the Role of the Product Market Wedge in Recessions," NBER Working Papers 20555, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Mark-up; cyclical dynamics; durable goods; non-durable goods; nonparametric econometrics; panel data econometrics;

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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