Macro Market Power and Distribution

Descripción del proyecto

Cuando el poder del mercado inclina la balanza y determina la desigualdad

En las economías avanzadas, unas pocas empresas ha acaparado una parte cada vez mayor de los beneficios, mientras que la participación de los trabajadores en la renta disminuye. Esto es lo que los economistas llaman «poder de mercado»: la capacidad de las grandes empresas para fijar los precios, los salarios y las reglas del juego. En el proyecto MACRO_POWR_DISTRBUTN, financiado por el Consejo Europeo de Investigación, se pretende explicar cómo este poder determina la desigualdad. A partir de datos de Bélgica y los Estados Unidos, el equipo del proyecto estudiará el tamaño de las empresas, las limitaciones financieras y la automatización para determinar cómo influyen estos factores en los salarios, los beneficios y la inversión. El objetivo es explicar por qué algunas empresas disfrutan de mayores beneficios pero pagan proporcionalmente menos a los trabajadores y cómo unas políticas más inteligentes podrían restablecer el equilibrio entre eficiencia y equidad.

Objetivo

Market power is about the distribution of economic surplus between firms, customers and workers. In this proposal, I use modern heterogeneous agents macro tools that incorporate heterogeneity in firm productivity, in preferences, and in market structure. I investigate the macroeconomic mechanisms that link market power and distributional characteristics and formulate welfare-improving policies that lead to efficiency gains and re-distribution.

I propose a unifying framework of market power and distribution in general equilibrium, and use unique data to address the following 3 questions:

1. How does firm size determine monopsony power? Large firms have lower markups yet higher markdowns. This is a key determinant behind the lower labor share in superstar firms, but we have no mechanism that explains why. I propose to use the unifying framework and Belgian VAT transaction data combined with matched employer-employee data to quantify the economic mechanism by which markdowns vary in the firm size distribution.

2. How do financial frictions influence market power? Low productivity firms tend to face tighter financial constraints, leading to higher dispersion in the distribution of capital and technology. This in turn increases market power. I have access to data from a private bank (Caixabank) on a representative sample of firms' payroll, accounts, as well as credit. Within the unifying framework I aim to quantify the impact of financial frictions on the distribution of market power.

3. How does labor-saving technological change affect the distribution of the labor share and market power? Technology adoption is driven by the firm's attempt to increase profitability. Incorporating general equilibrium effects and market power, I propose to analyze the substitution patterns within and between firms with the introduction of new technologies. I will use US Census data to quantify the distributional effects of labor-saving technological change.