Are Markups Driving the Ups and Downs of Inflation?

Leduc, Sylvain; Li, Huiyu; Liu, Zheng

Journal Article

Are Markups Driving the Ups and Downs of Inflation?

Abstract: How much impact have price markups for goods and services had on the recent surge and the subsequent decline of inflation? Since 2021, markups have risen substantially in a few industries such as motor vehicles and petroleum. However, aggregate markups—which are more relevant for overall inflation—have generally remained flat, in line with previous economic recoveries over the past three decades. These patterns suggest that markup fluctuations have not been a main driver of the ups and downs of inflation during the post-pandemic recovery.

Keywords: inflation; Price markups; aggregate markup; goods; services;