The Equitable Economy

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.

Americans’ retirement savings are disproportionately tied to the dozen Big Tech firms that now dominate the S&P. This makes any intervention into regulating Big Tech that risks devaluing them politically difficult, writes Hera Hyeonseo Lee.

Matt Lucky reviews Noam Schieber’s Mutiny: The Rise and Revolt of the College-Educated Working Class, now out at Macmillan.

Artificial intelligence will change the market for economic consultants, likely reducing overall demand and shifting workers to current clients’ in-house units. However, both consulting firms and clients are still studying how to deploy AI, and there may yet be new opportunities for consultants as AI changes the broader economy, write Mona Birjandi and Mery Zadeh.

Hannah Pittock argues that current analysis of reverse acquihires misses the core conceptual debate over antitrust’s antiquated treatment of hiring as benign vertical agreements between the laborers (the supplier) and employers (the buyer), in which labor is treated as one input among many.

Trade wars between the United States and Canada have sharply reduced the number of Canadian tourists traveling to the U.S. In new research, André Kurmann, Étienne Lalé, and Julien Martin use novel methods to measure how this decline in tourism has negatively impacted American workers and communities.

The House v. NCAA private antitrust settlement professionalized collegiate sports by requiring colleges and universities to compensate student athletes. The case has changed the economics of college sports, pushing schools to spend big to pay for top athletes to field teams that compete for championships. New research from the Progressive Policy Institute finds that although the new model has narrowed success to the top programs, the ability for schools to pay for success has now been mostly priced in, writes Diana L. Moss.

In new research, Luis Armona and Adam Rosenberg argue that current state firearm excise taxes inadequately address gun-related crimes. They propose a tax that benefits society by targeting guns responsible for the most homicides, while accommodating the challenging political economy of firearms regulation in the United States.

Matt Lucky reviews The Wage Standard: What’s Wrong in the Labor Market and How to Fix it by Arindrajit Dube, now out at Penguin Press.