Interpreting markups in Spanish manufacturing: the exponential model

In this paper we attempt to rationalize markups in a sample of Spanish manufacturing by assuming a representative consumer, profit-maximizing firms and constant returns to scale. We find that the standard forms of demand (CES and linear) do not provide a good explanation of markups. In contrast, a model where the representative consumer has an exponential utilty function yields results that match data more closely.

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Year of publication:	2010-11
Authors:	Corchón, Luis C. ; Moreno, Lourdes
Institutions:	Departamento de Economía, Universidad Carlos III de Madrid

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008740212