Market power and fiscal policy in OECD countries
We compute average markups as a measure of market power throughout time and study their interaction with fiscal policy and macroeconomic variables in a VAR framework. From impulse-response functions, the results, with annual data for a set of 14 OECD countries, show that the markup (i) depicts a pro-cyclical behaviour with productivity shocks and (ii) a counter-cyclical behaviour with fiscal spending shocks. We also use a PVAR, increasing the efficiency in the estimations, which confirms the country-specific results.
Year of publication: |
2013
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Authors: | Afonso, António ; Costa, Luís F. |
Published in: |
Applied Economics. - Taylor & Francis Journals, ISSN 0003-6846. - Vol. 45.2013, 32, p. 4545-4555
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Publisher: |
Taylor & Francis Journals |
Saved in:
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