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The Aggregate Implications of Market Power

Description du projet

Mesurer la réalité du pouvoir de marché

La capacité d’une très grande entreprise à contrôler le prix de marché de biens ou de services fait référence à son pouvoir de marché. En théorie, il s’agit de la façon dont cette entreprise maintient ses prix au‑dessus des coûts marginaux en augmentant ou en limitant l’offre ou la demande. En pratique, cela peut limiter la production, réprimer l’innovation et engendrer des inefficacités dans la répartition de la production. Le pouvoir de marché peut avoir des conséquences microéconomiques et macroéconomiques. Le projet M‑POWER, financé par l’UE, enquêtera sur l’ampleur et l’effet du pouvoir de marché à travers les secteurs, les régions et les pays. Pour quantifier ces effets, le projet utilisera de nouvelles techniques pour documenter les marges des entreprises dans l’économie toute entière, et il analysera les conséquences pour les producteurs et les consommateurs.

Objectif

It has been long understood by economists that market power can negatively affect welfare by limiting output, stifling innovation, and introducing inefficiencies in the overall allocation of production. On the one hand, there is ample evidence from case-studies, that the presence of market power, in the form of explicit or implicit cartels and other practices of anti-competitive behavior, can lead to substantial damages to producers and consumers in a given market. On the other hand, very little is known about the broad cross- sectional and time-series patterns of market power across sectors, regions and countries. In addition, and perhaps more importantly, if market power is at all present, does it affect so-called aggregate outcomes in the product and factor markets? For example should the analysis of productivity growth and investment take into account the presence of market power, and does market power play a role in labor market outcomes, such as e.g. in the recently reported decline in the labor share across a variety of countries? This project aims to fill the gap in the literature by applying recently developed techniques to, first of all, systematically document markups, across firms in the entire economy, and secondly, to analyze the implications for producers and consumers in the economy at large, including both product and input markets. While the macroeconomic literature on misallocation has considered a variety of distortions that affect the allocation of inputs across plants, the project introduces an empirical framework to quantify the welfare loss from market power. Special attention is given to the impact on productive inefficiency. The overall aim is to better understand, and quantify, how market power affects the allocation of resources in the context of heterogeneous producers, and empirically quantify the trade-off of price and cost effects.

Régime de financement

ERC-COG - Consolidator Grant

Institution d’accueil

KATHOLIEKE UNIVERSITEIT LEUVEN
Contribution nette de l'UE
€ 1 575 000,00
Adresse
OUDE MARKT 13
3000 Leuven
Belgique

Voir sur la carte

Région
Vlaams Gewest Prov. Vlaams-Brabant Arr. Leuven
Type d’activité
Higher or Secondary Education Establishments
Liens
Coût total
€ 1 575 000,00

Bénéficiaires (1)