The cyclicality of mark-ups and profit margins for the United Kingdom: some new evidence

Clare Macallan (), Stephen Millard () and Miles Parker
Additional contact information
Clare Macallan: Bank of England, Postal: Threadneedle Street London EC2R 8AH
Stephen Millard: Bank of England, Postal: Threadneedle Street London EC2R 8AH

No 351, Bank of England working papers from Bank of England

Abstract: In this paper, we assess the cyclicality of mark-ups and profit margins within the United Kingdom, at both the aggregate and industry level. We find that the private sector labour share moves countercyclically, suggesting that the aggregate mark-up moves procyclically. This result survives when we consider more sophisticated measures of the mark-up. And this result is also supported by industry-level data. We find that the aggregate market sector profit share moves procyclically and that the cyclical behaviour of profit margins is largely homogenous across industries. Nevertheless, there is some evidence that margins moved against the cycle in the late 1990s, starting to fall in 1997, whereas GDP growth did not peak until 2000. In tandem with these cyclical movements, we also find that the market sector profit share has trended upwards since 1970, in contrast to the aggregate mark-up, which fell over the same period.

Keywords: Mark-ups; profit margins. (search for similar items in EconPapers)
JEL-codes: E31 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eec and nep-mac
Date: 2008-08

Downloads: (external link)
http://www.bankofengland.co.uk/publications/workingpapers/wp351.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:boe:boeewp:0351

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England
Address: Publications Group Bank of England Threadneedle Street London EC2R 8AH
Contact information at EDIRC.
Series data maintained by Publications Group ().