Aghion, Philippe ORCID: 0000-0002-9019-1677, Bergeaud, Antonin, Boppart, Timo, Klenow, Peter J. and Li, Huiyu (2023) A theory of falling growth and rising rents. Review of Economic Studies, 90 (6). 2675 - 2702. ISSN 0034-6527
Full text not available from this repository.Abstract
Growth has fallen in the U.S. amid a rise in firm concentration. Market share has shifted to low labour share firms, while within-firm labour shares have actually risen. We propose a theory linking these trends in which the driving force is falling overhead costs of spanning multiple products or a rising efficiency advantage of large firms. In response, the most efficient firms (with higher markups) spread into new product lines, thereby increasing concentration and generating a temporary burst of growth. Eventually, due to greater competition from efficient firms, within-firm markups and incentives to innovate fall. Thus our simple model can generate qualitative patterns in line with the observed trends.
Item Type: | Article |
---|---|
Official URL: | https://academic.oup.com/restud |
Additional Information: | © 2023 The Author(s) |
Divisions: | Economics Centre for Economic Performance |
Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce |
JEL classification: | O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S.; Canada O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence |
Date Deposited: | 14 Dec 2023 12:27 |
Last Modified: | 12 Nov 2024 02:09 |
URI: | http://eprints.lse.ac.uk/id/eprint/121053 |
Actions (login required)
View Item |