Unravelling the Markups Changes: The Role of Demand Elasticity and Concentration

• Autorzy: Michał Gradzewicz , Jakub Mućk
• Języki publikacji: EN

Abstrakty

EN

We propose a framework allowing to identify sources changes in aggregatemarkups. Our approach derives from the conjectural variation theory and al-lows to evaluate the role of price elasticity of demand as well as concentrationin shaping the markups. In the empirical part, we show that a decline inthe aggregate markups in Poland, showed by Gradzewicz and Mu ́ck (2019),can be explained to a large extent by rising demand elasticity, while risingconcentration has mitigated this effect. We also document that at the indus-try level the globalization trends, e.g. international fragmentation, increasingstandardization and tighter integration with global economy, affect both de-mand elasticity and markups but in a theory-consistent, inverse way. Besides,we identify factors which are specific to demand elasticity (product varietiesand a home bias) and the markups (import content of exports). (original abstract)

Słowa kluczowe

EN

Price elasticity; Globalization; Demand

PL

Elastyczność cenowa; Globalizacja; Popyt

• Czasopismo: Collegium of Economic Analysis SGH - Working Papers
• Rocznik: 2020
• Numer: nr 56
• Strony: 21

Twórcy

autor

Michał Gradzewicz

• Warsaw School of Economics, Poland; National Bank of Poland

autor

Jakub Mućk

• Warsaw School of Economics, Poland; National Bank of Poland

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