The convergence of price-cost margins

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: This paper gives estimates of sectoral markup trends in thirteen OECD countries over the last three decades. It concludes with a slight, albeit heterogeneous, increase in price-cost margins (PCMs) overall, contrary to the generally expected effect of increased competition. More strikingly, it establishes a clear pattern of PCM convergence both across countries and sectors. This convergence means that high margins have shrunk and low margins grown. These movements seem to be linked to the decline in the labour share. They point to a need to search for factors counterbalancing the pro-competitive effect on markups

Keywords: Markup; price-cost margin; pro-competitive effect; wage bargaining; labour share (search for similar items in EconPapers)
JEL-codes: F02 J40 L11 L13 L60 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2005-09
New Economics Papers: this item is included in nep-com, nep-eec and nep-mic
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Citations: View citations in EconPapers (5)

Published in Open Economies Review, 2008, 19, pp.221–240

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00195890 (application/pdf)
https://doi.org/10.1007/s11079-007-9011-2

Related works:
Journal Article: The Convergence of Price–cost Margins (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:bla05056

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