Agrawal, Sneha; Gaurav, Abhishek; Suveg, Melinda - 2021
In this paper, we study a new channel to explain firms' price setting behavior. We propose that uncertainty about … factor prices has a positive effect on markups. We show theoretically that firms with higher shares of inputs with volatile … prices set higher markups. We use the Bartik shift-share approach to empirically test whether firms which use more oil …