Globalisation have generated a more or less competetive market according to the kind of rms.
The Great moderation has structural causes such as market power, which is possible to study
through the reduced form of the NKPC obtained with the Calvo and Rotemberg price setting
assumptions. The Calvo model fails to predict the increase of price volatility on Business to
Business (BotB) product markets where competition has denitively increased. By using a
model with upstream and downstream rms, according to the Theory of rm Literature, where
both are constraint by the Rotemberg price setting assumption, the model predicts the Great
Moderation in OECD economies only if the hypothesis of an increase in the global markup
is kept. Simulations replicate NKPC slope empirical estimations. This unusual hypothesis is
supported by the increasing share of prot in value added, by the development of credit market
in OECD countries and by the american increasing revenues inequalities. The model produces
endogeneous incentives to a more exible labor market and the development of credit market.
A global decreased competetive market gives an explanation of the barely growth of median
wage, compare to the growth of global productivity during the period of the Great Moderation
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