Working Paper: CEPR ID: DP17490
Authors: Jordi Jaumandreu
Abstract: Many economists believe that US markups have been rising in the latest years. The recent release of the updated NBER-CES database, that aggregates the results of the Survey of Manufactures/Census of Manufactures 1958-2018 (61 years) in 473 industries, allows us to scrutinize this idea in manufacturing. We show that firms’ average markups over the last 20 years have been remarkably stable, and confirm this finding using firm-level data from Compustat. We then look at reasons by which it is easy to have illusions of rising markups. Surprisingly, they imply that we cannot discard the fact that the markup was stable the precedent 20 years too.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| availability of new data (C82) | assessment of markups (L11) |
| stability of average markups (D43) | lack of significant upward trends in markups (L11) |
| illusion of rising markups (D43) | perceived increases in markups during the 1980s and 1990s (L11) |
| accounting problems and biased technological change (O33) | illusions of rising markups (D43) |
| measurement issues (C52) | modest increase of markups from 1980 to 2000 (L16) |
| stability of firm-level markups during the 2000s (L11) | conclusion that markups have not been rising (D43) |