This paper characterizes the short- and long-run Cournot equilibrium with heterogeneous firms and stochastic technological change. In our model, firms have different technologies with heterogeneous fixed and variable costs and various degrees of markups. In a framework with homogeneous firms,...

Research about trade liberalization's impact on markups has focused on manufacturing due to data availability considerations. How do these effects vary across sectors? Which industries become more and less competitive as trade barriers are eliminated? We leverage firm-level tax records from the...

We develop a macroeconomic agent-based model to study the role of demand and supply factors in determining inflation dynamics. Local interactions of heterogeneous firms and households in the labor and goods markets characterize the model. Asymmetric information implies that firm selection is...

The functioning of the banking sector is key for economic growth. In this paper, we first gather banks' balance sheet monthly regulatory information in a consistent manner for seven Latin American countries. Second, we estimate lending markups and deposits markdowns in each country over time....

This paper examines the relationship between wages and market power at the firm level. We derive firm-specific measures of labor market power and present a natural decomposition of wage changes into shifts in labor market power and labor productivity. Our findings indicate that 50-60 percent of...

The study examines the influence of markups on the export decisions and subsequent export intensity of firms within the Hungarian wine sector. Additionally, we evaluate the impact of entering and sustaining a presence in export markets on firms' markups and compare the markup levels between...

This article bridges monopoly, monopsony, and countervailing power theories to analyze their welfare implications in a vertical supply chain. We develop a bilateral monopoly model with bargaining that accommodates upstream monopsony and downstream monopoly power. In equilibrium, the...

This paper examines the effect of green investments on market power. I measure the market power as markup following the method provided in De Loecker and Warzynski (2012). For green investments, I consider specifically the investments of firms in energy efficient technologies, both as the binary...

Using data from the Current Population Survey (CPS) for 1994-2023, we show that the union wage mark-up for immigrants averages about 0.1 log points, 0.04 log-points less than that for natives. Therefore, unionization is less beneficial for immigrants than natives in the United States. The...

We study the determination of market power at the firm and industry levels when heterogeneous firms compete for sales to ex ante homogeneous buyers in a market with both directed and random search and free entry of firms that differ in productivity. Search and the distribution of productivity...

This paper derives a closed-form expression linking aggregate markups on im- ported inputs to concentration in a model of firm-to-firm trade with two-sided market power. Our theory extends standard oligopoly insights in two dimensions. First, it reveals that markups increase with exporter...

We study the determination of market power at the firm and industry levels when heterogeneous firms compete for sales to ex ante homogeneous buyers in a market with both directed and random search and free entry of firms that differ in productivity. Search and the distribution of productivity...

We analyse UK markups and profit margins for the pandemic period and its aftermath using unconsolidated balance sheets of non-financial corporations for both listed and unlisted firms. The markup increases by 14.7% between 2014 and 2022, exceeding any previously documented growth rate for UK...

We document how the interaction of supply chain pressures, elevated household inflation expectations, and firm pricing power contributed to the pandemic-era surge in consumer price inflation in the euro area. Initially, supply chain disruptions raised inflation, particularly in manufacturing,...

Discussions on "profit inflation" are mired in conceptual unclarities, definitional idiosyncrasies and data problems. This article attempts to bring conceptual clarity to the debate on profit inflation, defining profit inflation strictly as an increase in the gross output price that is caused by...

We study how the interaction of market power and nominal price rigidity influences inflation dynamics. We formulate a tractable model of oligopolistic competition and sticky prices and derive closed-form expressions for the pass-through of idiosyncratic and common cost shocks to firms' prices....

In this paper, I use firm-level data from Compustat to document the evolution of markups among listed U.S. non-financial firms during the height of the COVID-19 pandemic (2020-2022). I show that, continuing its long-term rise, the aggregate (sales-weighted) markup rises markedly in 2020 and...

This paper provides evidence from a natural experiment on the importance of tacit knowledge that workers have about firms' intangible assets for competition in product and labor markets. First, evidence is presented on product and labor market imperfections across firms in manufacturing and...

This paper investigates the positive international spillover effects of non-discriminatory product regulations, such as quality standards. We incorporate regulations into a multi-country general equilibrium framework with firm heterogeneity and variable markups. We model regulations as a...

This paper provides evidence from a natural experiment on the importance of workers' tacit knowledge about firms' intangible assets for competition in product and labor markets. Evidence is presented on product and labor market imperfections across manufacturing and services firms in the...

This paper provides a first empirical assessment of selected key indicators of the degree of competition in Austria in terms of industry concentration, firm-level markups and business dynamics. The analysis is based on firm-level data from 2008 to 2020 in collaboration with OECD Multiprod 2.0...

We develop a structural framework that allows us to quantify the evolution of aggregate bilateral trade costs and markups over time. With minimal assumptions, we can disentangle aggregate markup and trade cost changes from observed changes in trade flows. We apply our method to trade data...

Background Medicine pricing in the community pharmacy sector in Zimbabwe significantly influences accessibility to health care. In this pilot survey, we investigated how community pharmacies in Zimbabwe apply various mark-up strategies to essential and non-essential medicines, and gathered...

We develop and estimate a search model in which identical consumers trade with price-setting firms that differ in productivity. In the model, equilibrium distributions of both prices and markups are non-degenerate and continuous with a firm's price decreasing as its productivity increases....