The competition effect in business cycles : [Version 21 März 2012]

  • How do changes in market structure affect the US business cycle? We estimate a monetary DSGE model with endogenous …rm/product entry and a translog expenditure function by Bayesian methods. The dynamics of net business formation allow us to identify the 'competition effect', by which desired price markups and inflation decrease when entry rises. We …find that a 1 percent increase in the number of competitors lowers desired markups by 0.18 percent. Most of the cyclical variability in inflation is driven by markup fluctuations due to sticky prices or exogenous shocks rather than endogenous changes in desired markups.

Download full text files

Export metadata

Additional Services

Share in Twitter Search Google Scholar
Metadaten
Author:Vivien Lewis, Arnoud Stevens
URN:urn:nbn:de:hebis:30:3-240835
URL:http://www.imfs-frankfurt.de/fileadmin/user_upload/WP_2012_51.pdf
Parent Title (German):Working paper series / Institute for Monetary and Financial Stability ; 51
Series (Serial Number):Working paper series / Institute for Monetary and Financial Stability (51)
Publisher:Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2012
Year of first Publication:2012
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2012/04/03
Tag:Bayesian estimation; business cycles; competition; entry; markups
Issue:Version 21 März 2012
Page Number:32
HeBIS-PPN:311797504
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Institute for Monetary and Financial Stability (IMFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:C Mathematical and Quantitative Methods / C1 Econometric and Statistical Methods: General / C11 Bayesian Analysis
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht