The Markup and the Business Cycle Reconsidered.

A fresh interpretaion is provided of the influential finding that the markup of prices over marginal costs is counter-cyclical. Using Rotemberg and Woodford's data set we argue that the markup is best modelled as a variable that is integrated of order one. A consequence of this finding is that the markup cannot be related in the long run with business-cycle variables since these are traditionally thought of as being stationary.

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Year of publication:	2000
Authors:	Banerjee, A. ; Russell, B.
Institutions:	Department of Economics, European University Institute
Subject:	INFLATION \| PRICES \| PRODUCTIVITY

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Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Notes:	27 pages
Classification:	C22 - Time-Series Models ; C32 - Time-Series Models ; C52 - Model Evaluation and Testing ; D40 - Market Structure and Pricing. General ; E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005744315