Market concentration and producer prices
This study investigates the role of sectoral market structure in the inflationary dynamics of the domestic producer prices (D-PPI) in Türkiye. We start by reporting the fact that industries with intense competition had lower producer price inflation compared to industries with low-competition in the...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Elsevier
2023-03-01
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| Series: | Central Bank Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S130307012300001X |
| Summary: | This study investigates the role of sectoral market structure in the inflationary dynamics of the domestic producer prices (D-PPI) in Türkiye. We start by reporting the fact that industries with intense competition had lower producer price inflation compared to industries with low-competition in the past few years. Further investigation shows that this differentiation across industries corresponds to the years with higher exchange rate volatility. The industries characterized with low-competition have higher annual producer price inflation on average than those that are characterized with high-competition especially during the periods of high exchange rate volatility. Results are robust to a wide set of additional specifications and cast light on the role of market structure on firms’ pricing behavior in Türkiye. |
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| ISSN: | 1303-0701 |