Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18820
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1456
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Using annual data on nine manufacturing sectors of eighteen OECD countries, the article studies the implications of market structure for cross-country relative price variability. It is found that, in accordance with predictions from a standard markup pricing model, reductions in market competition, along with increased nominal exchange rate volatility, are associated with greater variability of cross-country relative prices. The market structure also has similar effects on components of cross-country relative price variability. The empirical findings are robust to the inclusion of various control variables and alternative sample specifications.
Subjects: 
relative price volatility
market structure
price-cost margin
variance decomposition
JEL: 
F31
F41
Document Type: 
Working Paper
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