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Markup Dynamics and Inflation: An Empirical Analysis of Sweden's Largest Firms During the COVID-19 Crisis

Jarnemyr, Anton Roger LU (2026) NEKH02 20251
Department of Economics
Abstract
This thesis examines the evolution of markups among the largest publicly listed firms in Sweden, represented by the OMXS30 index, during the period surrounding the COVID-19 pandemic from 2018 to 2024. The study assesses whether changes in firms’ pricing power contributed to Sweden’s inflationary and subsequent disinflationary dynamics. Using a microeconomic production function approach developed by De Loecker and Warzynski (2012) and adapted by Kharroubi et al. (2023), firm-level markups are estimated and analyzed over time. The findings indicate that while aggregate markups remained relatively stable, large firms were able to sustain or slightly increase markups during periods of economic disruption. This suggests that firm-level pricing... (More)
This thesis examines the evolution of markups among the largest publicly listed firms in Sweden, represented by the OMXS30 index, during the period surrounding the COVID-19 pandemic from 2018 to 2024. The study assesses whether changes in firms’ pricing power contributed to Sweden’s inflationary and subsequent disinflationary dynamics. Using a microeconomic production function approach developed by De Loecker and Warzynski (2012) and adapted by Kharroubi et al. (2023), firm-level markups are estimated and analyzed over time. The findings indicate that while aggregate markups remained relatively stable, large firms were able to sustain or slightly increase markups during periods of economic disruption. This suggests that firm-level pricing power may have influenced inflation persistence and the disinflation process, with implications for monetary policy effectiveness in concentrated markets. (Less)
Please use this url to cite or link to this publication:
author
Jarnemyr, Anton Roger LU
supervisor
organization
course
NEKH02 20251
year
type
M2 - Bachelor Degree
subject
keywords
Markups, Pricing Power, Inflation
language
English
id
9219334
date added to LUP
2026-02-04 08:29:33
date last changed
2026-02-04 08:29:33
@misc{9219334,
  abstract     = {{This thesis examines the evolution of markups among the largest publicly listed firms in Sweden, represented by the OMXS30 index, during the period surrounding the COVID-19 pandemic from 2018 to 2024. The study assesses whether changes in firms’ pricing power contributed to Sweden’s inflationary and subsequent disinflationary dynamics. Using a microeconomic production function approach developed by De Loecker and Warzynski (2012) and adapted by Kharroubi et al. (2023), firm-level markups are estimated and analyzed over time. The findings indicate that while aggregate markups remained relatively stable, large firms were able to sustain or slightly increase markups during periods of economic disruption. This suggests that firm-level pricing power may have influenced inflation persistence and the disinflation process, with implications for monetary policy effectiveness in concentrated markets.}},
  author       = {{Jarnemyr, Anton Roger}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Markup Dynamics and Inflation: An Empirical Analysis of Sweden's Largest Firms During the COVID-19 Crisis}},
  year         = {{2026}},
}