The Relationship Between the Markup and Inflation in the G7 Plus One Economies

Anindya Banerjee, Bill Russell

    Research output: Contribution to conferencePaper

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    Abstract

    An I(2) analysis of inflation and the markup is undertaken for the G7 economies and Australia. We find that the levels of prices and costs are best described as I(2) processes and that except for Japan a linear combination of the log levels of prices and costs cointegrate to the markup that is integrated of order 1. It is also shown that the markup in each case cointegrates with inflation and that higher inflation is associated with a lower markup in the long-run and vice versa.
    Original languageEnglish
    Number of pages16
    Publication statusPublished - 2000
    EventEconometric Society 8th World Congress - Seattle, United States
    Duration: 11 Aug 200016 Aug 2000
    http://www.econometricsociety.org/meetings/wc00/AUTORUN.HTM

    Conference

    ConferenceEconometric Society 8th World Congress
    CountryUnited States
    CitySeattle
    Period11/08/0016/08/00
    Internet address

    Keywords

    • Inflation
    • Wages
    • Prices
    • Markup
    • I(2)
    • Polynomial cointegration

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    Banerjee, A., & Russell, B. (2000). The Relationship Between the Markup and Inflation in the G7 Plus One Economies. Paper presented at Econometric Society 8th World Congress, Seattle, United States. http://ideas.repec.org/p/ecm/wc2000/0242.html