News

In February, the Federal Trade Commission settled with pharmaceutical benefits manager (PBM) Express Scripts. The FTC had sued Express Scripts and two other large PBMs under the long dormant Section 5 of the FTC Act, which targets “unfair methods of competition.” The settlement suggests that the FTC may succeed in addressing the convoluted contracts between PBMs, drug manufacturers, health insurers, and employers that drive up drug prices for Americans. It also opens unchartered territory for antitrust enforcement and the limits of Section 5, argue Fiona Scott Morton and Mariah Smith.

In new research, Christos Makridis and Andrew Johnston find that industries exposed to generative AI are seeing an increase in production, employment, and wages. However, the majority of AI-driven revenue growth is channelled back to capital as profits, rather than to workers.

In new research, Ido Baum, Leszek Balcerowicz, Jakub Karnowski and Andrzej Rzońca assess how Poland achieved economic growth with a populist government. They argue that the economic success is misleading and Poland’s leading party passed harmful policies that affect the country’s long-term growth opportunities. 

An accounting rule introduced by the Financial Accounting Standards Board in 2016 was designed to address a flaw in the previous regime that contributed to the 2008 Financial Crisis. However, this same rule is enabling the circuit of investments that flows from Big Tech companies to artificial intelligence startups, whose increased valuation from these investments increases the value of the Big Tech companies, which they can then reinvest in the AI startups. The risk is an AI bubble that, if it pops, will also blow up Americans’ savings, writes Hera Hyeonseo Lee.

In new research, Louis Pape and Michelangelo Rossi find that the European Union’s Digital Markets Act’s prohibition on self-preferencing had little effect on the popularity of Google Maps relative to competitors. User preference for the incumbent service appears to outweigh frictional barriers to access.

In new research in collaboration with Color of Change, Dante Donati and Lena Song find that comments on social media posts help drive platform engagement for organizations. However, comment sections are often populated by a vocal minority, and adversarial comments from them come with reduced off-platform support for the original posters.

In new research, Joel Dodge and Ganesh Sitaraman argue that a comprehensive industrial policy to secure American supply chains and ensure access to essential goods should incorporate the deployment of public factories.

Artificial intelligence coding agents provide enormous value to consumers for very low fees. But the market is quickly shrinking with Anthropic in the lead. Only competition, and requiring Big Tech to build agents rather than buy them, will continue to let AI’s value flow to consumers. As such, the courts should ban SpaceX’s recently proposed acquisition of Cursor, writes Ketan Ahuja.

In new research, Michele Fioretti and Alessandro Iaria discuss how a landmark Norwegian court ruling shows how constitutional constraints on the government’s ability to retroactively change contracts can encourage private innovation and reshape entire industries.

In new research, Marco Battaglini, Valerio Leone Sciabolazza, Mengwei Lin and Eleonora Patacchini study how the deaths of large donors change candidates’ electoral results and congressional activity in a new measure of donors’ influence in American politics.