Chapter 16 The cyclical behavior of prices and costs

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1、Chapter16THECYCLICALBEHAVIOROFPRICESANDCOSTSJULIOJ.ROTEMBERGHarvardBusinessSchoolMICHAELWOODFORDPrincetonUniversityContentsAbstract1052Keywords10521.Introduction:MarkupsandtheBusinessCycle10532.Thecyclicalbehaviorofmarkups10572.1.Cyclicalbehaviorofthel

2、aborshare10582.2.Correctionstothelabor-sharemeasureofrealmarginalcost10642.2.1.Anon-Cobb-Douglasproductionfunction10642.2.2.Overheadlabor10652.2.3.Marginalwagenotequaltotheaverage10692.2.4.Costsofadjustingthelaborinput10722.2.5.Laborhoarding10762.2.6.V

3、ariableutilizationofcapital10792.3.Alternativemeasuresofrealmarginalcost10812.3.1.Intermediateinputs10812.3.2.Inventoryfluctuations10842.3.3.Variationinthecapitalstock10862.4.Theresponseoffactorpricestoaggregateshocks10862.5.Cross-sectionaldifferencesi

4、nmarkupvariation10923.Implicationsofmarkupvariationsforbusinessfluctuations10933.1.Explainingcyclicalvariationinproductivityandprofits10943.1.1.Cyclicalproductivity10943.1.2.Cyclicalprofits11003.2.Identifyingtheoutputfluctuationsduetomarkupvariation110

5、44.Modelsofvariablemarkups11124.1.Stickyprices11134.2.Variationsindesiredmarkups11194.2.1.Varyingelasticityofdemand11194.2.2.Customermarkets1120HandbookofMacroeconomics,Volume1,EditedbyJ.B.TaylorandM.Woodford©1999ElsevierScienceB.VAllrightsreserved1051

6、1052J.JRotembergandM.Woodford4.2.3.Implicitcollusion11234.2.4.Variableentry11254.3.Interactionsbetweennominalrigiditiesanddesiredmarkupvariations11265.Conclusions1129Acknowledgment1131References1131AbstractBecauseinputsarescarce,marginalcostisanincreas

7、ingfunctionofoutput.Diminishingreturns,costsofincreasingemploymentaswellastheincreasingmarginaldisutilityofworkingwhenhoursworkedandeffortriseallcontributetomakethisfunctionsteep.Withoutchangesinthisfunctionrelatingmarginalcosttooutput,aggregateoutputc

8、anvaryifandonlyifthemarkupofpricetomarginalcost(theinverseofrealmarginalcostfortypicalfilmS)varies.Wefirststudywhether,empirically,realmarginalcostdoesriseincyclicalexpansions.Averagereallaborcostisnotveryprocyclicalbut,forseveralreason