Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153607
Authors: 
Afonso, António
Costa, Luís F.
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper 1173
Abstract: 
We compute average mark-ups as a measure of market power throughout time and study their interaction with fiscal policy and macroeconomic variables in a VAR framework. From impulse-response functions the results, with annual data for a set of 14 OECD countries covering the period 1970-2007, show that the mark-up (i) depicts a pro-cyclical behaviour with productivity shocks and (ii) a mildly counter-cyclical behaviour with fiscal spending shocks. We also use a Panel Vector Auto-Regression analysis, increasing the efficiency in the estimations, which confirms the countryspecific results.
Subjects: 
Fiscal Policy
Mark-up
Panel VAR
VAR
JEL: 
D4
E0
E3
H6
Document Type: 
Working Paper

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