TY  - JOUR
AU  - Branson,William H.
AU  - Marston,Richard C.
TI  - Price and Output Adjustment in Japanese Manufacturing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2878
PY  - 1989
Y2  - March 1989
UR  - http://www.nber.org/papers/w2878
L1  - http://www.nber.org/papers/w2878.pdf
N1  - Author contact info:
William H. Branson
Economics Department
341 Wallace Hall
Princeton University
Princeton, NJ  08544-1013
Tel: 609/258-6918
Fax: 609/258-6419
E-Mail: N/A user is deceased

Richard C. Marston
Department of Finance, Wharton School
University of Pennsylvania, 2300 Steinberg-Dietric
3620 Locust Walk
Philadelphia, PA  19104-6367
Tel: 215/898-7626
Fax: 215/573-2242
E-Mail: marstonr@wharton.upenn.edu
AB  - This paper investigates the importance of markup behavior in Japanese manufacturing. According to the evidence presented, Japanese firms have varied the markups of prices over marginal costs in order to limit the effects of exchange rate changes on output. This behavior is quite different from that found in U.S. manufacturing where output and employment have borne the main impact of recent exchange rate changes. The paper examines markups in nine sectors of manufacturing which are major producers of exports. In all nine sectors, Japanese prices prove to be highly sensitive to foreign prices and exchange rates as well as to more traditional demand and supply variables. The paper shows that variable markups rather than high price elasticities account for this price behavior, since output is relatively insensitive to prices or exchange rates.
ER  -