Research @ BaylorBusiness -- Hankamer School of Business
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Faculty from departments in the Baylor University Hankamer School of Business provide their research contributions to this site.
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Browsing Research @ BaylorBusiness -- Hankamer School of Business by Subject "Inflation"
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Item Does Consumer Search Matter for Firm Markups?(2005-08-13T17:08:44Z) Gwin, Carl R.This study investigates the relationship between consumer search costs, inflation, and firm markups in retail trade by employing actual measures of search cost. Consistent with theory, results indicate that markups can be higher if search costs are higher and increases in inflation lead to increases in markups if search costs are sufficiently high. Two competing hypotheses on the link between inflation and markups, namely consumer search costs and alternatively long-term seller/buyer contracts, are then evaluated. As long-term contracts are rare in retail trade, this study's results make it hard to justify studying how inflation impacts firm markups without considering search costs.Item Openness, Central Wage Bargaining, and Inflation(2005-08-13T17:49:37Z) Daniels, Joseph P.; Nourzad, Farrokh; VanHoose, David D.This paper develops a model of an open economy containing both sectors in which wages are market-determined and sectors with wage-setting arrangements. A portion of the latter group of sectors coordinate their wages, taking into account that their collective actions influence the equilibrium inflation outcome in an environment in which the central bank engages in discretionary monetary policymaking. Key predictions forthcoming from this model are (1) increased centralization of wage setting initially causes inflation to increase but then results in an inflation dropoff, (2) a greater degree of centralized wage setting reduces the inflation-restraining effect of greater central bank independence, and (3) increased openness is more likely to reduce inflation in nations with less centralized wage bargaining. Analysis of data for seventeen nations for the period 1970-1999 provides generally strong and robust empirical support for all three of these predictions.