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

Anindya Banerjee; Bill Russell

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

Anindya Banerjee, Bill Russell

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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 language	English
Number of pages	16
Publication status	Published - 2000
Event	Econometric Society 8th World Congress - Seattle, United States Duration: 11 Aug 2000 → 16 Aug 2000 http://www.econometricsociety.org/meetings/wc00/AUTORUN.HTM

Conference

Conference	Econometric Society 8th World Congress
Country/Territory	United States
City	Seattle
Period	11/08/00 → 16/08/00
Internet address	http://www.econometricsociety.org/meetings/wc00/AUTORUN.HTM

Keywords

Inflation
Wages
Prices
Markup
I(2)
Polynomial cointegration

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title = "The Relationship Between the Markup and Inflation in the G7 Plus One Economies",

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.",

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T1 - The Relationship Between the Markup and Inflation in the G7 Plus One Economies

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AU - Russell, Bill

PY - 2000

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N2 - 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.

AB - 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.

KW - Inflation

KW - Wages

KW - Prices

KW - Markup

KW - I(2)

KW - Polynomial cointegration

M3 - Paper

T2 - Econometric Society 8th World Congress

Y2 - 11 August 2000 through 16 August 2000

ER -

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

Abstract

Conference

Keywords

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