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Sandeep Mazumder
 
''The Long-Run Relationship Between Inflation and the Markup in the U.S.''
( 2011, Vol. 31 No.1 )
 
 
This paper examines the long-run relationship between inflation and a new measure of the price-marginal cost markup. This new markup index is derived while accounting for labor adjustment costs, which a large number of the papers that estimate the markup have ignored. We then examine the long-run relationship between this markup measure, which is estimated using U.S. manufacturing data, and inflation. We find that decreases in the markup that are associated with a percentage point increase in inflation are much smaller than previous studies have found.
 
 
Keywords: Markup; Inflation; Marginal Cost.
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
D4 - Market Structure and Pricing: General
 
Manuscript Received : Aug 25 2010 Manuscript Accepted : Jan 30 2011

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