Autor(en): Juessen, Falko
Linnemann, Ludger
Titel: Markups and fiscal transmission in a panel of OECD countries
Sprache (ISO): en
Zusammenfassung: This paper studies the role of the markup of price over marginal cost for the transmission of fiscal policy shocks. We construct time series of markups allowing for fluctuations in capacity utilization and total factor productivity and use an aggregate production function that is more general than Cobb-Douglas. Including the constructed markup series in a panel vector autoregression with annual OECD data, we find that a positive shock to government spending substantially lowers markups while raising output, consumption, real interest rates, and government debt. The positive output response appears to result mainly from the positive reaction of capital utilization rather than from the one of hours worked. JEL classification: E62, E32, C33
Schlagwörter: Fiscal policy
Government spending
Markup
Panel VAR
URI: http://hdl.handle.net/2003/27264
http://dx.doi.org/10.17877/DE290R-8727
Erscheinungsdatum: 2010-06-10T14:42:40Z
Enthalten in den Sammlungen:Sonderforschungsbereich (SFB) 823

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