by Summary:
These new facts are particularly puzzling from the point of view of the standard neoclassical economic model, in which markets are perfectly competitive. In this view, profits should not persist over the long run, let alone enable the owners of corporations to increase their share of income over time. The standard model, however, cannot address many of the fundamental changes that have occurred in the U.S. economy over the past 40 years.In order to explain these new trends, I and my co-authors make several modifications to the standard model, among them positing imperfect market competition, financial assets based on monopoly profits, and the possibility that the natural rate of interest can change. With these parsimonious modifications, our model can explain the data in ways the old
Topics:
Mike Norman considers the following as important: assumptions, economic rent, economics and power, imperfect competition, inequality, market power, neoclassical economics
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These new facts are particularly puzzling from the point of view of the standard neoclassical economic model, in which markets are perfectly competitive. In this view, profits should not persist over the long run, let alone enable the owners of corporations to increase their share of income over time. The standard model, however, cannot address many of the fundamental changes that have occurred in the U.S. economy over the past 40 years.In order to explain these new trends, I and my co-authors make several modifications to the standard model, among them positing imperfect market competition, financial assets based on monopoly profits, and the possibility that the natural rate of interest can change. With these parsimonious modifications, our model can explain the data in ways the old
Topics:
Mike Norman considers the following as important: assumptions, economic rent, economics and power, imperfect competition, inequality, market power, neoclassical economics
This could be interesting, too:
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These new facts are particularly puzzling from the point of view of the standard neoclassical economic model, in which markets are perfectly competitive. In this view, profits should not persist over the long run, let alone enable the owners of corporations to increase their share of income over time. The standard model, however, cannot address many of the fundamental changes that have occurred in the U.S. economy over the past 40 years.WCEG
In order to explain these new trends, I and my co-authors make several modifications to the standard model, among them positing imperfect market competition, financial assets based on monopoly profits, and the possibility that the natural rate of interest can change. With these parsimonious modifications, our model can explain the data in ways the old model cannot.
Here’s how it works:
How the rise of market power in the United States may explain some macroeconomic puzzles
Jacob A. Robbins, Ph.D. candidate in economics at Brown University and a doctoral fellow at the Washington Center for Equitable Growth
See also
Kaldor and Piketty’s facts: The rise of monopoly power in the United States
Gauti Eggertsson, Jacob A. Robbins, Ella Getz Wold