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Thursday, November 19, 2020 | History

2 edition of Capital market imperfections and countercyclical markups : theory and evidence found in the catalog.

Capital market imperfections and countercyclical markups : theory and evidence

Judith A. Chevalier

Capital market imperfections and countercyclical markups : theory and evidence

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  • 1 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Markup.,
  • Liquidity (Economics),
  • Recessions.,
  • Capital market.

  • Edition Notes

    StatementJudith A. Chevalier, David S. Scharfstein.
    SeriesNBER working paper series -- no. 4614, Working paper series (National Bureau of Economic Research) -- working paper no. 4614.
    ContributionsScharfstein, David., National Bureau of Economic Research.
    The Physical Object
    Pagination45 p. ;
    Number of Pages45
    ID Numbers
    Open LibraryOL22427017M


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Capital market imperfections and countercyclical markups : theory and evidence by Judith A. Chevalier Download PDF EPUB FB2

Issue Date January During recessions, output prices tend to rise relative to wages and raw-materials prices. One explanation of this fact is that imperfectly competitive firms compete less aggressively during recessions - that is, markups of price over marginal cost are countercyclical.

We present a model in which markups are countercyclical because of capital-market by: Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence. By JUDITH A. CHEVALIER AND DAVID S. SCHARFSTEIN*. During recessions, output prices seem to rise relative to wages and raw-material.

prices. One explanation is that imperfectly competitive firns compete less ag. gressively during recessions. Get this from a library. Capital market imperfections and countercyclical markups: theory and evidence.

[Judith A Chevalier; David Scharfstein; National Bureau of Economic Research.]. Title: Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence Created Date: Z. Capital Market Imperfections and Countercyclical Markups: Theory and Evidence.

Judith Chevalier and David Scharfstein. NoNBER Working Papers from National Bureau of Economic Research, Inc. Abstract: During recessions, output prices tend to rise relative to wages and raw-materials prices. One explanation of this fact is that imperfectly competitive firms compete less aggressively during recessions - that is, markups of price over marginal cost are by: Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence.

Judith Chevalier and David Scharfstein. American Economic Review,vol. 86, issue 4, Abstract: During recessions, output prices seem to rise relative to wages and raw-material prices.

One explanation is that imperfectly competitive firms compete less aggressively during recessions. We present a model in which markups are countercyclical because of capital-market imperfections.

During recessions, liquidity-constrained firms try to boost short-run profits by raising prices to cut their investments in market share. We provide evidence from the supermarket industry in support of this theory.

The authors present a model of countercyclical markups based on capital-market imperfections. During recessions, liquidity-constrained firms boost short-run profits by raising prices to cut their investments in market share.

The authors provide evidence from the supermarket industry in support of this theory. Despite the evidence supporting the existence of a link between capital market imperfections and markups in product markets with consumer switching costs, there are a few issues that are still unresolved.

Firstly, as noted by Chevalier and Scharfstein (), it is difficult to draw macro-economic inferences from empirical papers where. A number of theoretical Capital market imperfections and countercyclical markups : theory and evidence book including Greenwald, Stiglitz, and Weiss (), Gottfries () and Klemperer () have shown that capital market imperfections can induce counter-cyclical markups.

The basic economic intuition behind these contributions is that firms under the threat of liquidation are less likely to set low prices in product differentiated industries in order to gain market shares. We present a model in which markups are countercyclical because of capital-market imperfections.

During recessions, liquidity-constrained. firms try to boost short-run profits by raising prices to cut their investments in market share. We provide evidence from the supermarket industry in support of this theory.

We present a model of countercyclical markups based on capital-market imperfections. During recessions, liquidity-constrained firms boost short-run profits by raising prices to cut their investments in market share.

We provide evidence from the supermarket industry in support of this theory. THE IMPACT OF FINANCING CONSTRAINTS ON MARKUPS: THEORY AND EVIDENCE FROM ITALIAN FIRM LEVEL DATA by behavior of price-cost margins.

In particular, if markups are countercyclical, this could Despite the evidence supporting the existence of a link between capital market imperfections and markups in product markets with consumer switching.

Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence. During recessions, output prices seem to rise relative to wages and raw-material prices. One explanation is that impelfectly competitive Jirms compete less ag- gressively during recessions. That is, markups of price over marginal cost are countercyclical.

Macroeconomic Theory IV. Imperfections and Macro A star denotes required reading. Labor markets * Blanchard, O., “Flows, Bargaining, and Unemployment”, Notes, February “Capital–Market Imperfections and Countercyclical Markups: Theory and Evidence”, AER, September86.

Xu, Jin, Profitability and Capital Structure: Evidence from Import Penetration (Octo ). Journal of Financial Economics (2), Capital Market Imperfections and Countercyclical Markups: Theory and Evidence.

Furthermore, when markups are countercyclical, the introduction of “capital market imperfections” increases the degree of countercyclicality relative to the benchmark Rotemberg-Saloner model, in which firms always survive downturns.

The next section presents the model and gives the main results. The model. Chevalier, Judith A., and David S. Scharfstein.

"Capital Market Imperfections and Countercyclical Markups: Theory and Evidence." American Economic Rev no. 4 (September ): – Cited by: Liquidity Constraints and the Cyclical Behavior of Markups.

by Chevalier, Judith A. & Scharfstein, David S. Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket Industry. by Chevalier, Judith A. Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence.

Chevalier, Judith A., and Scharftein, David S. "Capital-market Imperfections and Countercyclical Markups: Theory and Evidence. “American Economic Review 86 (September; ): Kohoe, Michale R “Quality Uncertainty and Price in Monopoly Markets”.

Journal of Industrial Economics 44 (March ) Abstract. This article first shows that countercyclical variations in the ratios of prices to marginal cost (markups) can cause pro-cyclical fluctuations in the demand for labour at a given real wage and thus induce fluctuations in economic activity that look like business cycles.

"Capital Market Imperfections and Countercyclical Markups: Theory and Ev- idence." National Bureau of Economic Research (Cambridge, MA) Working Pa- per No.January Farrell, Joseph and Shapiro, Carl. "Dynamic Competition with Switching Costs." Rand Journal of Economics, Spring19(1), pp.

This paper provides empirical evidence on the link between industry pricing dynamics and industry capital structure. We find evidence of countercyclical mark-up behaviour as predicted by Chevelier and Scharfstein ().

The mark-ups are more countercyclical for industries with higher debt ratio. ''Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence.'' American Economic Review, 86(4),– The book's clear and logical organization begins with an. “ Capital-Market Imperfections and Countercyclical Markups: Theory and Evidence.” The American Economic Review, 86, 4, Pp.

PDF. Book (1) Journal Article (34) Recent Publications. Social Risk, Fiscal Risk, and the Portfolio of Government Programs; Pension Policy and the Financial System. Cyclical Markups Theories and Evidence (Classic Reprint) pogyn No Comments.

Cyclical markups theories and evidence. Capital–market imperfections and countercyclical markups: theory and evidence. American Economic Review, 86, – Dynamic Competition with Switching Costs.

Article. Full-text available. Capital Market Imperfections and Countercyclical Markups: Theory and Evidence. Chevalier & D. Scharfstein.

American Economic Review. Article. Capital structure and product-market competition: Empirical evidence from the supermarket industry.

Chevalier. American Economic Review - September (Vol. 86) [Orley Ashenfelter] on *FREE* shipping on qualifying offers. American Economic Review - September (Vol. 86)Author: Orley Ashenfelter. “ Capital Market Imperfections and Countercyclical Markups: Theory and Evidence.” American Economic Review, 86 (), Fama & French () divide the company size and book-to- market ratio (B/M) into 5 groups respectively, and construct 25 size-and-B/M investment portfolio.

We choose the data of size of the company at June 30 of each year, and take the B/M ratio at December 31 of each year. Capital-Market Imperfections and Countercyclical Markups: Theory.

To elucidate the countercyclical markups with GNP, we regressed components of markup on GNP. Table 3 shows coefficients of each component regressed on GNP. Industrial price index (lnP) have positive coefficients in 15 industries with negative ones in 9 cal coefficient (lnz), labor share (lnSL), and capital share (lnSK) show positively strong correlations with.

with David S. Scharfstein, “Capital Market Imperfections and Countercyclical Markups: Theory and Evidence,” American Economic Review, September “Do LBO Supermarkets Charge More. An Empirical Analysis of the Effects of LBOs on Supermarket Pricing,” Journal of Finance, September Chevalier, J.“Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket Industry.” American Economic Review 85 (): – Chevalier, J., and D.

Scharfstein.“Capital-Market Imperfections and Countercyclical Markups:Theory and Evidence.” American Economic Rev no. 4 (): – 7. See Chevalier, J. and Scharfstein, D. (), «Capital Market Imperfections and Countercyclical Markups: Theory and Evidence», The American Economic Review, Vol.

86, and Gilchrist et al. (), «Inflation Dynamics During the Financial Crisis», Mimeo. For Spanish firms, see Montero, J.

and Urtasun, A. (), «Price-cost mark-ups in the. We expect an inverse relation between the WCR and the market-to-book ratio. Capital Market Access "Capital Market Imperfections and Countercyclical Markups: Theory and Evidence," American Economic Rev Cunat, V.,"Trade Credit: Suppliers as Debt Collectors and Insurance Providers," Review of Financial Stud Capital structure and product-market competition: Empirical evidence from the supermarket industry.

JA Chevalier. The American Economic Review,Capital market imperfections and countercyclical markups: Theory and evidence. JA Chevalier, DS Scharfstein. Chevalier and Scharfstein () have a model in which capital market imperfections lead to countercyclical pricing.

Rotemberg and Woodford () provide evidence of countercyclical markups for the US. Note that a positive coefficient on capacity utilisation may also indicate rising marginal cost The markup may also be posi. Inventories, Markups and Real Rigidities in Sticky Price | kapyc | Say something Countercyclical markups and news-driven business cycles.

“Corporate Finance, the Theory of the Firm, and Organizations,” with Patrick Bolton, Journal of Economic Perspectives, Fall“Capital Market Imperfections and Countercyclical Markups: Theory and Evidence,” American Economic Review, September. with David S.

Scharfstein, “Capital Market Imperfections and Countercyclical Markups: Theory and Evidence,” American Economic Review, September “Do LBO Supermarkets Charge More?Recommended text book for students that want to research in the field: Motta, M.,“Capital Market Imperfections and Countercyclical Markups: Theory and Evidence.” The American Economic Review –Bils, Mark "Real Wages over the Business Cycle: Evidence from Panel Data." Journal of Political Economy 93 (August): Chevalier, Judith A., and Scharfstein, David S.

"Capital Market Imperfections and Countercyclical Markups: Theory and Evidence." National Bureau of Economic Research Working Paper No (January).