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dc.contributor.authorGABLER, Alain
dc.date.accessioned2007-10-22T16:10:30Z
dc.date.available2007-10-22T16:10:30Z
dc.date.issued2007
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/7165
dc.description.abstractThe counter-cyclicality in the relative price of equipment investment which is observed in the U.S. has been attributed to equipment-specific pro- ductivity shocks. Cross-country evidence indicates that a number of coun- tries experience sizeable delays between a surge in equipment production and a fall in its relative price, which is dfficult to reconcile with sector- specific shocks. I show that in the presence of sector specific, time-varying markups, relative price movements arise as a direct consequence of con- sumption smoothing, even if all shocks are aggregate, while barriers to firm entry lead to delays in relative price responses. A calibrated version of the model explains around one-third of the relative price fluctuations which are observed in the U.S., as well as the qualitative differences in the behaviour of this relative price across countries.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2007/25en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectE25en
dc.subjectE32en
dc.subjectD43en
dc.subjectEndogenous markupsen
dc.subjectFirm entry and exiten
dc.subjectrelative pricesen
dc.titleSector-specific Markup Fluctuations and the Business Cycleen
dc.typeWorking Paperen
dc.neeo.contributorGABLER|Alain|aut|
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