Norges Bank

Staff Memo

The downs and ups of mark-ups

Leif Brubakk and Kåre Hagelund
Staff Memo


Based on sectoral National accounts data and estimates of the implicit rental rate of capital, we calculate price mark-ups for 42 Norwegian industries for the period 1980-2019. The results indicate a broad-based increase in mark-ups over the sample period, with an average increase of roughly 20 percentage points. Taken at face value, the secular rise in mark-ups have added almost 0.5 percentage points to GDP inflation each year since 1980. As part of the analysis, we also trace out movements in factor shares. Our results indicate a widespread decline in capital shares, and more so than for labor shares. Hence, our findings cast doubt on factor substitution as an important explanation for the decline in the aggregate labor share and instead point to increased corporate market power as the main culprit.

Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.

ISSN 1504-2596 (online)

Published 17 January 2023 12:45
Published 17 January 2023 12:45