Working Paper
A nonparametric panel data approach to the cyclical dynamics of price-cost margins
Kiel Working Papers, 1580
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Publication Date
JEL Classification
E32
L16
L60
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Related Topics
Innovation and Structural Change
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.
