|
| |
| 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 |
|
