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Retailer Market Concentration, Buyer-Size Discounts and Inflation Dynamics

Author

Listed:
  • Mayumi Ojima

    (Bank of Japan)

  • Junnosuke Shino

    (Bank of Japan)

  • Kozo Ueda

    (Wasada University)

Abstract

This study considers the macroeconomic effects of retailer market concentration and buyer-size discounts on inflation dynamics. During Japan’s “lost decades”, large retailers enhanced their market power, thus increasing the exploitation of buyer-size discounts in the procurement of goods. We incorporate this effect into an otherwise standard New Keynesian model. Calibrating to the Japanese economy during the lost decades, we find that these developments led to a deflation of approximately 0.1% annually.

Suggested Citation

  • Mayumi Ojima & Junnosuke Shino & Kozo Ueda, 2018. "Retailer Market Concentration, Buyer-Size Discounts and Inflation Dynamics," The Japanese Economic Review, Springer, vol. 69(1), pages 101-127, March.
    • Handle: RePEc:spr:jecrev:v:69:y:2018:i:1:d:10.1111_jere.12150
    DOI: 10.1111/jere.12150
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    References listed on IDEAS

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    More about this item

    Keywords

    E31; E32; L11;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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