Pricing over the cycle

H. Bloch, M. Olive*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)

Abstract

In recent studies, the cyclical behavior of markups is examined, but the role of costs in determining markups is ignored. Here, a pricing equation is estimated that implicity measures the rate of change in markup as a function of aggregate demand growth, aggregate inflation and industry cost inflation. Results for 21 two-digit SIC industries in the U.S. over 1948 to 1979 show incomplete pass-through from cost into price, implying a negative relationship between cost and the markup. Aggregate inflation positively influences prices and markups. Aggregate demand negatively influences prices and markups in highly concentrated industries, but not otherwise.

Original languageEnglish
Pages (from-to)99-108
Number of pages10
JournalReview of Industrial Organization
Volume19
Issue number1
DOIs
Publication statusPublished - 2001

Keywords

  • Business cycle
  • Price-cost markups
  • Pricing

Fingerprint

Dive into the research topics of 'Pricing over the cycle'. Together they form a unique fingerprint.

Cite this