A nonparametric panel data approach to the cyclical dynamics of price-cost margins in the fourth Kondratieff wave

By using nonparametric and panel data econometrics, this paper reassesses 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 non-durable goods, instead, find more empirical support.