At our anniversary edition of the Forum for Economic Dialogue we focused on questions around superstar firms and their impact on society. The speakers examined the topic from several perspectives, with the regulatory aspect in the foreground.
After all, the majority of speakers agreed, dominant firms bring more harm than good. The market power of superstar firm has far-reaching negative consequences, such as a declining market dynamism, fewer startups, lower wages.
Panelists also shared concerns about superstar firms’ influence on the political discourse. Accordingly, the role of the state and antitrust law was discussed in detail with a focus on the new EU legislative proposals Digital Services Act (DSA) and Digital Markets Act (DMA), which go beyond antitrust law.
At our anniversary edition of the Forum for Economic Dialogue we focused on questions around superstar firms and their impact on society. The speakers examined the topic from several perspectives, with the regulatory aspect in the foreground.
After all, the majority of speakers agreed, dominant firms bring more harm than good. The market power of superstar firm has far-reaching negative consequences, such as a declining market dynamism, fewer startups, lower wages.
Since 1980, the world economy has experienced an increase of dominant firms. Dominant firms face limited competition in their market and exert monopoly power. Why has this happened, and why did it start in 1980? The rise of dominant firms has a direct impact on customers who pay higher prices, but it also has far-reaching implications for the macroeconomy. Widespread market power leads to wage stagnation and a decline in the labor share, it increases wage inequality, it slows down business dynamism, it reduces the number of startup firms and lowers innovation.
In Public Paper #12 Eeckhout reviews the determinants of the rise of dominant firms, discusses the causes and consequences, and proposes directions for policy solutions.
Since 1980, the world economy has experienced an increase of dominant firms. Dominant firms face limited competition in their market and exert monopoly power. Why has this happened, and why did it start in 1980? The rise of dominant firms has a direct impact on customers who pay higher prices, but it also has far-reaching implications for the macroeconomy. Widespread market power leads to wage stagnation and a decline in the labor share, it increases wage inequality, it slows down business dynamism, it reduces the number of startup firms and lowers innovation.
In Public Paper #12 Eeckhout reviews the determinants of the rise of dominant firms, discusses the causes and consequences, and proposes directions for policy solutions.
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