MARK-UP RATE FLUCTUATIONS IN THE BUSINESS CYCLE : A KALECKIAN VIEW(Designated Research Projects)

This is a methodological research on mark-up fluctuations based on a Kaleckian view. Actual mark-up rates seem to fluctuate in the business cycle whatever pricing procedure is taken, between a Kalecki type, the full cost principle, and others. To explain these fluctuations theoretically, we present an aggregated price by market type: competitive, oligopolistic, and restricted markets. The respective price reflects the operating rate of capacity and the change of demand in the real world. We explain these prices by mark-up rates in one way or another, arguing on the movement of these mark-up rates in the business cycle. The concluding remarks based on our price setting equation are that the mark-up rate tends to fluctuate procyclically; we need to use a mark-up rate function for the estimate of actual mark-up rates