Cyclical and Competitive Influences on Pricing in Australian Manufacturing |
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Authors: | HARRY BLOCH MICHAEL OLIVE |
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Affiliation: | School of Economics and Finance, Curtin University of Technology, Perth, Australia |
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Abstract: | Dynamic pricing equations are estimated using an error correction model, with data on a panel of 89 Australian manufacturing industries for the 14 years, 1971172 through 1984/85. The overall pattern is consistent with prices approximately following a fixed mark-up rule in low concentration industries, while the mark-up factor in high concentration industries is strongly pro-cyclical. Also, in high concentration industries that are heavily exposed to import competition, the mark-up factor increases with prices of foreign competing products and with the general price level for domestic manufactures. |
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