The Phillips Curves Across the Atlantic: It is the Price Curves that Differ

Daniel Cohen and Emmanuel Farhi

No 3100, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The Paper highlights one critical difference between Europe and the US regarding the Phillips curve: the behaviour of prices. While they are quickly restored to an equilibrium level in the US, European prices are driven by highly counter-cyclical mark-ups. In bad times, European firms manage to keep their price high relative to cost, while their US counterparts are pressed into cuts and discounts of various forms. We show that this behaviour is the critical reason why Phillips curve look different across the Atlantic, much more than because of differences arising on the labour markets.

Keywords: Phillips curve; Mark-up; Labour market (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Date: 2001-12
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP3100 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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: https://EconPapers.repec.org/RePEc:cpr:ceprdp:3100

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP3100

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().