Briefing

How Costly Is Rising Market Power for the U.S. Economy?

Abstract: We survey the recent, active debate on market power in the U.S. economy. While typical studies on market power focused on narrow industries due to data constraints, the relevance of market power for the aggregate economy was reinvigorated by a study focusing on publicly traded firms that documented a significant rise in U.S market power since the 1980s. This article is meant to provide a bird's-eye view of the (sometimes heated) discussion on market power. Furthermore, we examine the macroeconomic consequences of a rise in U.S. market power.

Keywords: market power; macroeconomy; Markups; welfare costs;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2023-07

Volume: 23

Issue: 24