Cyclical and competitive influences on pricing in Australian manufacturing

Dynamic pricing equations are estimated using an error correction model, wi th data on a panel of 89 Australian manufacturing industries for the 14 yea rs, 1971/72 through 1984/85. The overall pattern is consistent with prices approximately following a fixed mark-up rule in low concentration industrie s, while the mark-up factor in high concentration industries is strongly pr o-cyclical. Also, in high concentration industries that are heavily exposed to import competition, the mark-up factor ina eases with prices of foreign competing products and with the general price level for domestic manufactu res.