Markup variation and endogenous fluctuations in the price of investment goods
By: Max Floetotto, Nir Jaimovich, and Seth Pruitt.
Contributors: Jaimovich, Nir.; Pruitt, Seth.
Series: International finance discussion papers -- no. 968; International finance discussion papers (Online) -- no. 968.
Publisher: Federal Reserve Board
Published: 2009
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "The two sector model presented in this note suggests a simple structural decomposition of movements in the price of investment goods into exogenous and endogenous sources.  The endogenous fluctuations arise in the presence of countercyclical markups which vary differently across the consumption and investment sectors.  In turn, the movements in the markups are due to endogenous procyclical net business formation.  The model, while being consistent with the countercyclicality of the price of investment goods, suggests that about a quarter of the movement in the price series can be attributed to this endogenous mechanism"--Federal Reserve Board web site.
Notes: Title from PDF file as viewed on 6/22/2009.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.