This paper analyzes markup responses of Danish firms to Chinese imports. Besides negative markup responses due to competitive pressure, we present some evidence for marginal cost savings related to Chinese intermediate goods imports which tend to raise firm-level markups.

In many forward-looking macroeconomic models, such as the New Keynesian model, firms' expectations about the future play a key role in determining outcomes today. We examine this hypothesis using a novel panel dataset on firms actual and expected price changes collected by the Confederation of...

We study economies in which agents face Knightian uncertainty about state prices. Knightian uncertainty leads naturally to nonlinear expectations. We introduce a corresponding equilibrium concept with sublinear prices and prove that equilibria exist under weak conditions. In general, such...