Determinants of cyclical properties of the price-cost margin in US manufacturing industries

In Kwon Lee

International Economic Journal, 2001, vol. 18, issue 3, 353-364

Abstract: Supergame theoretical predictions tell that oligopoly pricing may be procyclical or counter-cyclical. Industry by industry analysis shows that the speed of industry growth and the size of fixed cost are crucial in distinguishing characteristically counter-cyclical industries from procyclical industries. Counter-cyclical industries are characterized by high growth of demand and low fixed costs. Procyclical industries are characterized by low growth of demand and high fixed costs.

Keywords: JEL Classification: C72; L11; L60; Procyclical industries; counter-cyclical industries; price-cost margin; growth rate of demand; fixed cost (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1080/1016873042000270009

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