Price and Investment Dynamics: An Empirical Analysis of Plant Level Data

Price and investment equations are estimated using a unique data set for Swedish manufacturing plants. The empirical specification is based on a theoretical model of a financially constrained firm selling its output in a customer market. We find that, as predicted by our theoretical model, prices respond strongly to cost shocks but are not much affected by variations in demand and high predetermined investment is associated with a higher price.

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Year of publication:	2004-06-18
Authors:	Lundin, Magnus ; Gottfries, Nils ; Lindström, Tomas
Institutions:	Nationalekonomiska Institutionen, Uppsala Universitet
Subject:	Cyclical price adjustment \| price rigidity \| price equation \| countercyclical markup

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Forthcoming in Journal of Money, Credit, and Banking, 2008. The text is part of a series Working Paper Series Number 2004:7 41 pages
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005771041