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Fiscal episodes, technological progress and market power
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Autores
Orientador(es)
Resumo(s)
We assess the impact of fiscal adjustments (and technology) on the evolution of markups in a panel of 14 OECD countries. We allow for smooth changes in the technological parameters by generating
measures of TFP compatible with markups and assess the interaction between the two variables. Our results with narrative action-based data show counter-cyclicality since negative fiscal shocks increase markups. Moreover, in times of economic contraction the degree of counter-cyclicality of negative (positive) government spending (tax) shocks is larger than during economic expansions. In addition, markups have a pro-cyclical behaviour after a productivity shock. However, when identifying fiscal consolidations using changes of the cyclically adjusted primary balance, o ne obtains expansionary effects and a pro-cyclical behaviour in terms of markups and aggregate demand shocks.
Descrição
Palavras-chave
Imperfect Competition TFP Fiscal Consolidation Local Projection Business Cycle Impulse Response Functions GMM
Contexto Educativo
Citação
Afonso, António, João Tovar Jalles .2015. "Fiscal episodes, technological progress and market power". Instituto Superior de Economia e Gestão. DE Working papers nº 9-2015/DE/UECE
Editora
ISEG – Departamento de Economia