Bottom-Up Markup Fluctuations (joint with Ariel Burstein and Basile Grassi)

Abstrac:
This paper studies properties of markup fluctuations in an heterogeneous firm environment where there are no aggregate shocks. We are interesting in exploring (i) how the cyclicality of markups (i.e. pro- vs. countercyclical markups) depends on the market structure of the different sectors of the economy, (ii) the quantitative importance of firm-level shocks in aggregate markup fluctuations, and, (iii) the empirical behaviour of markup at the firm-, sector-, and, aggregate-level in US and French data.