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Rising Markups, Rising Prices?

Author

Listed:
  • Christopher Conlon
  • Nathan H. Miller
  • Tsolmon Otgon
  • Yi Yao

Abstract

The rise in markups and market power documented by De Loecker, Eeckhout, and Unger (2020) has recently generated much discussion in economics. We measure the correlation between the change in firm level markups and the change in industry level prices as measured by the Producer Price Index and find little to no relationship both for 1980–2018 and 2018–present. While a "false negative" result due to mismeasurement is possible, it also raises the possibility that firms have not passed along declines in marginal costs to consumers or that there have been significant changes in scale elasticities.

Suggested Citation

  • Christopher Conlon & Nathan H. Miller & Tsolmon Otgon & Yi Yao, 2023. "Rising Markups, Rising Prices?," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 279-283, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:279-83
    DOI: 10.1257/pandp.20231098
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    File URL: https://doi.org/10.3886/E189826V1
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    Cited by:

    1. repec:ags:aaea22:335988 is not listed on IDEAS
    2. Michalis Nikiforos & Simon Grothe & Jan David Weber, 2024. "Markups, profit shares, and cost-push-profit-led inflation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(2), pages 342-362.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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