Afonso, AntónioCosta, Luis2022-09-262022-09-262013Afonso, António and Luís Costa. (2013)."Market power and fiscal policy in OECD countries". Applied Economics, Vol. 45, No. 32: pp. 4545-4555.1466-4283 (Online)http://hdl.handle.net/10400.5/25595We compute average markups as a measure of market power throughout time and study their interaction with fiscal policy and macroeconomic variables in a VAR framework. From impulse-response functions, the results, with annual data for a set of 14 OECD countries, show that the markup (i) depicts a pro-cyclical behaviour with productivity shocks and (ii) a counter-cyclical behaviour with fiscal spending shocks. We also use a PVAR, increasing the efficiency in the estimations, which confirms the country-specific results.engFiscal PolicyMarkupVARPVARjournal article10.1080/00036846.2013.795275