TY - RPRT A1 - Lewis, Vivien A1 - Stevens, Arnoud T1 - The competition effect in business cycles : [Version 9 März 2012] N2 - How do changes in market structure affect the US business cycle? We estimate a monetary DSGE model with endogenous …rm/product entry and a translog expenditure function by Bayesian methods. The dynamics of net business formation allow us to identify the 'competition effect', by which desired price markups and inflation decrease when entry rises. We …find that a 1 percent increase in the number of competitors lowers desired markups by 0.18 percent. Most of the cyclical variability in inflation is driven by markup fluctuations due to sticky prices or exogenous shocks rather than endogenous changes in desired markups. KW - Bayesian estimation KW - business cycles KW - competition KW - entry KW - markups Y1 - 2012 UR - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/34513 UR - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-345132 UR - http://www.hec.unil.ch/documents/seminars/deep/766.pdf IS - Version 9 März 2012 ER -