Source: Market power and competition explain every problem in the US economy, new research argues — Quartz
In a recent paper, De Loecker and Eeckhout analyzed the balance sheets of listed companies from 1950 to 2014. (In 2014, these firms accounted for around 40% of all sales.)
Higher markups suggest an increase in what economists refer to as “market power.” … higher markups don’t necessarily imply more market power. It is conceivable that there are larger upfront costs to starting a company today than in the past, and that higher markups are necessary to make up for this. Economist Noah Smith provides an excellent review of other criticisms of the paper.