UCL Department of Economics


Chanwoo Kim

Chanwoo Kim


Chanwoo Kim - Website


Research interests

Macroeconomics, Business Cycles, Monetary Policy, and Heterogeneous Agent Models


Paper Title - 'Markup, Customer Base, and Firm Dynamics'


Abstract - This paper studies the firm-level markup dynamics over the business cycles. We document two pieces of new empirical evidence: (i) individual firm markup is countercyclical to productivity and monetary policy shocks, (ii) smaller firms have more countercyclical markups to the shocks. To explain the new evidence, we propose a demand-driven firm dynamics model with endogenous entry and exit. In our model, the customer base makes the firm pricing problem dynamic, so firms compare current profit and the value of the customer base when they set markup. The model is consistent with the data, and further can match the speed of firm growth and turnover.


  • Professor Morten Ravn
  • Dr Vincent Sterk
  • Professor Albert Marcet