Concentration in Product Markets

Benkard, C. Lanier; Yürükoğlu, Ali; Zhang, Anthony Lee

doi:10.2139/ssrn.3838512

Cited by 4 publications

(4 citation statements)

References 15 publications

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“…While relevant market definition is often the object of intense debate in antitrust litigation, a general principle is that it should include the set of goods that are close substitutes for the same set of consumers (Davis and Garcés, 2009). Benkard, Yurukoglu and Zhang (2021) note that economic census data whereby firms are classified into industries are collected at the point of production rather than consumption and so may be less useful for analyzing the relation between market concentration and consumer welfare. In contrast, the Harmonized System (HS) product categories defined by the United Nations used in trade data classify goods with a similar end-use, and so are conceptually like the relevant product markets in antitrust analysis.…”

Section: Introductionmentioning

confidence: 99%

Natural Resource Dependence and Monopolized Imports

Arezki¹,

Fernandes²,

Merchán³

et al. 2023

Policy Research Working Papers

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Countries with greater commodity export intensity have more concentrated markets for imported goods. Within countries over time, import market concentration is associated with higher domestic prices, suggesting that markups due to greater concentration outweigh any potential cost efficiency. Hydrocarbon fuel exporting economies especially have higher tariffs, tariff evasion, and non-tariff measures that concentrate markets. These results suggest a novel channel for the resource curse stemming from the monopolization of imports.

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Section: Introductionmentioning

confidence: 99%

Natural Resource Dependence and Monopolized Imports

Arezki¹,

Fernandes²,

Merchán³

et al. 2023

Policy Research Working Papers

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“…In our formal description below, we abstract from changes in local consumer types and simply treat this as a change in the scale of the market.22 A model using similar preferences has been recently used byBenkard, Yurukoglu and Zhang (2021) to explain the change in concentration in US product markets.23 We can think of FN as the fixed costs of sourcing and advertising each variety, and the cost of space associated to placing each variety at the store.…”

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confidence: 99%

Local Retail Prices, Product Variety, and Neighborhood Change

Borraz,

Carozzi,

González-Pampillón

et al. 2024

American Economic Journal: Economic Policy

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We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-based tax exemption in the city of Montevideo. The introduction of new housing stock induced by the policy causes a reduction in grocery prices of 2.3 percent and an increase in locally available product varieties. Using insights from a multiproduct model of imperfect competition and estimates for different types of stores, we show these changes are the result of incumbents’ response to an increase in local demand. (JEL L81, O18, R22, R23, R31, R38)

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“…We provide an explicit calibration exercise in Appendix G showing that the most popular off-the-shelf functional form,Klenow and Willis (2016), is incapable of simultaneously matching all the relevant sufficient statistics in the data.9 See Table6.10 Whether concentration is in fact increasing for relevant market definitions or whether the Phillips curve has indeed flattened over time are topics that are beyond the scope of this paper. See e.g Rossi-Hansberg et al (2021),Benkard et al (2021),Smith and Ocampo (2021). on the former, and e.g.,McLeay and Tenreyro (2020), Del Negro et al (2020), Hooper et al (2020,Hazell et al (2020) on the latter.…”

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confidence: 99%

The Supply-Side Effects of Monetary Policy

Baqaee,

Farhi,

Sangani

2024

Journal of Political Economy

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We propose a supply-side channel for the transmission of monetary policy. We show that in an economy with heterogeneous firms and endogenous markups, demand shocks such as monetary shocks have a first-order effect on aggregate productivity. If high-markup firms have lower passthroughs than low-markup firms, as is consistent with empirical evidence, then a monetary easing reallocates resources to high-markup firms and alleviates misallocation. Consequently, positive "demand shocks" are accompanied by endogenous positive "supply shocks" that raise output and productivity, lower inflation, and flatten the Phillips curve. We derive a tractable four-equation dynamic model and use it to show that monetary shocks generate a procyclical hump-shaped response in TFP and endogenous cost-push shocks in the New Keynesian Phillips curve. A calibration of our model suggests that the supply-side effect increases the half-life of a monetary shock's effect on output by about 30% and amplifies the total impact on output by about 70%. Using identified monetary shocks, we provide empirical evidence for both the macro-and microlevel predictions of our model.

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Concentration in Product Markets

Cited by 4 publications

References 15 publications

Natural Resource Dependence and Monopolized Imports

Natural Resource Dependence and Monopolized Imports

Local Retail Prices, Product Variety, and Neighborhood Change

The Supply-Side Effects of Monetary Policy

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