This paper gives estimates of sectoral markup trends in thirteen OECD countries over the last three decades. It concludes with a slight, albeit heterogeneous, increase in price-cost margins (PCMs) overall, contrary to the generally expected effect of increased competition. More strikingly, it...

The treatment of capital costs, as either fixed or variable is a key for estimating markups. Data leans clearly towards fixity, which explains the high markups emphasized in previous studies based on Roeger's methodology. Direct estimation from the ratio of output over variable costs is preferable.

Previous studies have emphasized that Roeger's methodology generates too high markups. This feature is confirmed on the basis of the unrealistically low capital shares implied by the estimates herein. Theoretically, it is shown that the normalization choice, the slow adjustment of capital and...

This paper gives estimates of sectoral markup trends over the last three decades. It concludes with a slight increase of price-cost margins overall, contrary to the generally expected effect of increased competition. More strikingly, it establishes a clear pattern of markup convergence across...

Previous analyses showed that product market deregulation often precedes labor market (LM) reforms. This paper introduces LM imperfections within an economic geography framework, the level of optimal LM regulation being based on each country's social preferences. Due to capital mobility, opening...

This study analyzes the determinants of price-cost margins (PCMs) for OECD countries between 1970-2003. The main objective is to quantify the pro-competitive effect of international trade and understand why, despite trade liberalization, PCMs have not fallen overall. An increase of one...