Markups' cyclical behaviour: the role of demand and supply shocks

Antonio Afonso and Joao Jalles

Applied Economics Letters, 2016, vol. 23, issue 1, 1-5

Abstract: We assess how demand and supply shocks (identified via the Blanchard and Quah (1989) structural vector autoregression approach) in 14 OECD countries affect markups. We find that individual responses of markups to demand shocks push down the markup for most countries (confirmed in the panel analysis). On the other hand, a supply shock has a more mixed effect.

Date: 2016
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Working Paper: Markups’ Cyclical Behavior: The role of Demand and Supply Shocks (2015)
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DOI: 10.1080/13504851.2015.1044640

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