More Markups

U.S. firm markups over prices rose 11% between 1980 and 2015, but the reason is likely quite benign. The primary cause is the shift by consumers, who have become steadily wealthier, towards buying more services, which has allowed service providers to boost markups. That, in turn, has caused the service sector to grow as a percentage of the economy and thus overall markups as a percent of GDP to rise.