Markup matters: monetary policy works through aspirations
BankUnderground
MARCH 28, 2024
Tim Willems and Rick van der Ploeg Since the post-Covid rise in inflation has been accompanied by strong wage growth, interactions between wage and price-setters, each wishing to attain a certain markup, have regained prominence. In our recently published Staff Working Paper , we ask how monetary policy should be conducted amid, what has been referred to as, a ‘battle of the markups’.
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