Kiel Working Papers, Kiel Institute for World Economics
No 1580:
A nonparametric panel data approach to the cyclical dynamics of price-cost margins
Andrea Vaona
Abstract: By using nonparametric and panel data econometrics, this
paper re-assesses the effect of both the current level of economic activity
and of future expected demand on the dynamics of the price mark-up over
marginal cost in US manufacturing industries from 1958 to 1996.
Consistently with previous results, the current level of economic activity
has a negative impact on the mark-up and expectations of future demand a
positive one. Differences between consumer and producer goods and between
more and less competitive sectors play a minor role. Differences between
durable and nondurable goods, instead, find more empirical support
Keywords: mark-up, cyclical dynamics, durable goods, non-durable goods, nonparametric econometrics, panel data econometrics; (follow links to similar papers)
JEL-Codes: L60,; L16,; E32; (follow links to similar papers)
29 pages, January 2010
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