CYCLICALITY OF MARKUPS IN THE EU FOOD INDUSTRY AND THE MICHAŁ KALECKI THEORY

Abstract

The problem of markups cyclicality is nowadays one of the most urgent one, as the assumption of countercyclical markups is a key one in a number of neokeynesian macroeconomic models. The aim of the paper was to use the Kalecki theory to explain the mechanism behind the countercyclical markups in the EU and Polish food sectors taking advantage of literature review and logical reasoning. Moreover, as an answer for the newest studies indicating procyclical markups in the EU and the USA, it was checked, utilizing panel regressions, if the EU food sector markups cyclicality is different from that of other EU manufacturing industries. It was concluded, that although the Kalecki explanation of countercyclical markups is still in force regarding the EU countries food sector, it is no longer adequate in regards to the EU manufacturing sector.