» Bottom-up Markup Fluctuations« (joint with Ariel Burstein and Vasco M. Carvalho)

We study markup cyclicality in a macroeconomic model with oligopolistic competition and granular shocks. In our model, shocks to individual firms result in changes in market shares and markups of individual firms. Aggregating up these  firm-level outcomes, the model generates fluctuations in sectoral and in economy-wide markups. We assess the model’s ability to reproduce salient features of the cyclical properties of markups in French firm level data, from the bottom (firm) level to the aggregate level.