The antitrust moment!

Industry concentration in the US

If we are to think, Timothy Taylor argues, that the US economy is suffering from lack of dynamism and competition and hence is in need of stricter enforcement of antitrust laws then we should first understand whether the rising concentration: a) is a problem in most of the economy or only in a few niches, b) the result of actions that benefit or hurt consumers; and finally c) is rising concentration viewed badly only through a political lens.

Three Questions for the Antitrust Moment
By: Timothy Taylor – Journal of Economic Perspectives

Politics and antitrust

Today, European markets have lower concentration, lower excess profits, and lower regulatory barriers to entry. We document this surprising outcome and propose an explanation using a model of political support. Politicians care about consumer welfare but also enjoy retaining control over industrial policy. We show that politicians from different countries who set up a common regulator will make it more independent and more pro competition than the national ones it replaces.

How EU Markets Became More Competitive Than US Markets: A Study of Institutional Drift
Authors: Germán Gutiérrez, Thomas Philippon
From: New York University

Niche sectors and rising concentration

Diez and al. use data from publicly traded companies in 74 countries and find that concentration in the US and in most advanced countries has increased especially in industries closer to the technology frontier. They also argue that firms in concentrated industries are characterized by decreasing investment and innovation rates.

Global Market Power and its Macroeconomic Implications
Authors: Federico Diez, Daniel Leigh, Suchanan Tambunlertchai
From: IMF

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