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Revue de l'OFCE

2006/5 (no 97 bis)

Article précédent Pages 303 - 318 Article suivant



This paper estimates the dynamics of price cost margins in UK manufacturing over the period 1989-1997 and links it to the implementation of the Single Market Program. Using the Hall-Roeger methodology, we find a dramatic decline in price cost margins by 25% after 1990. This suggests that firms anticipated the competitive shock induced by the Single Market Program, which created a more competitive environment.
JEL Classification: F1, L1, L6.


  • single market program
  • price cost margins
  • UK
  • firm-level data

Plan de l'article

  1. Introduction
  2. Methodology
    1. Seminal work (Hall, 1986, 1988; Domowitz et al., 1988)
    2. Coping with endogeneity and time varying parameters
  3. Dataset
  4. Results
    1. The dynamics of average price cost margins
    2. Price cost margins by industry
    3. Cyclicality and SMP effect
  5. Discussion and Conclusion
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