Markups’ cyclical behaviour: the role of demand and supply shocks |
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| Authors: | António Afonso João Tovar Jalles |
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| Institution: | 1. Department of Economics;2. UECE – Research Unit on Complexity and Economics, ISEG/UL – University of Lisbon, Lisbon, Portugal;3. Center for Globalization and Governance, Nova School of Business and Economics, Lisboa, Portugal |
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| Abstract: | We assess how demand and supply shocks (identified via the Blanchard and Quah (1989) structural vector autoregression approach) in 14 OECD countries affect markups. We find that individual responses of markups to demand shocks push down the markup for most countries (confirmed in the panel analysis). On the other hand, a supply shock has a more mixed effect. |
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| Keywords: | Blanchard–Quah markup VAR impulse response function local projection |
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