Market power and fiscal policy in OECD countries
We compute average markups 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, show that the markup (i) depicts a pro...
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| Format: | article |
| Language: | eng |
| Published: |
2022
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| Online Access: | http://hdl.handle.net/10400.5/25595 |
| Country: | Portugal |
| Oai: | oai:www.repository.utl.pt:10400.5/25595 |
| Summary: | We compute average markups 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, show that the markup (i) depicts a pro-cyclical behaviour with productivity shocks and (ii) a counter-cyclical behaviour with fiscal spending shocks. We also use a PVAR, increasing the efficiency in the estimations, which confirms the country-specific results. |
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