EconPapers    
Economics at your fingertips  
 

Measured Productivity with Endogenous Markups and Economic Profits

Anthony Savagar

No 2110, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: I study the effect of dynamic firm entry, scale economies and oligopolistic competition on measured productivity and output amplification. These features cause measured productivity (Solow residual) to exceed pure technology. I decompose measured productivity into pure technology and an endogenous component that is caused by firm-level output variation interacting with increasing returns to scale. In turn, I show that firm-level output variation depends on economic profits and markups that vary in response to dynamic entry and oligopolistic competition. I estimate the pure technology series adjusted for profits and markups and show that it is less volatile and more persistent than a benchmark model, whilst still generating output amplification.

Keywords: Markups; Firm Entry; Productivity; Scale Economies; Oligopolistic Competition (search for similar items in EconPapers)
JEL-codes: C62 D21 D43 E32 L13 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2021-03
New Economics Papers: this item is included in nep-bec and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.lse.ac.uk/CFM/assets/pdf/CFM-Discussio ... MDP2021-10-Paper.pdf (application/pdf)

Related works:
Journal Article: Measured productivity with endogenous markups and economic profits (2021) Downloads
Working Paper: Measured Productivity with Endogenous Markups and Economic Profits (2019) Downloads
Working Paper: Measured Productivity with Endogenous Markups and Economic Profits (2018) Downloads
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: https://EconPapers.repec.org/RePEc:cfm:wpaper:2110

Access Statistics for this paper

More papers in Discussion Papers from Centre for Macroeconomics (CFM) Contact information at EDIRC.
Bibliographic data for series maintained by Helen Power ().

 
Page updated 2024-05-21
Handle: RePEc:cfm:wpaper:2110