inflation
Do Antitrust Enforcers Know They Induce Shrinkflation?
The United States has recently experienced shrinkflation. Many companies have downsized their products while keeping prices unchanged or even raising prices. Barak Orbach argues that misguided beliefs that failed antitrust policies enabled the decay of business morality have compromised the understanding of shrinkflation. The phenomenon typically arises when supply shocks or other factors inflate production costs in the economy and competitive pressures limit the ability of businesses to raise prices to pass on cost increases.
Inflation Paranoia and the Return of the New Consensus in Macroeconomics
Economists have proposed two main theories to explain the recent spike in prices. Progressives have attributed the rise in inflation to corporate greed and have suggested price controls in response. Other economists have turned back to the New Consensus in Macroeconomics that arose in the 1970s in response to steep inflation blamed on the large Keynesian fiscal expansion of the preceding decades. MatÃas Vernengo writes that neither camp has correctly diagnosed the problems with current inflation. Proponents of Greedflation overlook the price stability of the last few decades even as market concentration increased. On the other hand, advocates of the New Consensus similarly forget their history and the commodity shocks and price-wage spiral that were the real culprit for inflation in the 1970s.
The Neo-Brandeisians Are Wrong About Greedflation
Some progressive politicians and advocates have argued that lax antitrust policies enabled the inflation surge that began in 2021 and that aggressive antitrust enforcement is crucial to combatting inflation. These assertions are misguided and misleading. Similar greedflation theories emerged during previous inflation spikes, but their promotion this time has proven counterproductive. The allure of trustbusting ideas, it seems, is starting to wane.
The Ten Most-Popular ProMarket Articles from 2022
From critiques of the Consumer Welfare Standard to discussions about inflation, here are the ten most popular ProMarket articles from 2022.
Antitrust Enforcement, Inflation and Corporate Greed: What do we know?
At a recent Centre for Economic Policy Research (CEPR) event, panelists, including the Stigler Center's own Luigi Zingales, reflected on the roles...
Chart of the Week: Economists Don’t Think Congress Should Make Price Gouging Illegal
Most economists disagree with a new bill in the US that would set limits on "unconscionably excessive prices," according to a recent...
Neoliberal Economists Are Giving Biden Bad Advice on Inflation
To spare the economy from the pain of further interest rate hikes, the President should aggressively pursue anticompetitive conduct by companies in...
How Should Developing Countries Deal With Inflation? A Q&A With Raghuram Rajan
Former central banker Raghuram Rajan speaks to ProMarket about how sources and remedies for inflation differ from the US in developing countries...
Inflation, Corporate Power, and the Forgotten New Deal
A forgotten aspect of the New Deal is that it took place amid inflation and rising prices. Contemporary debates over inflation and whether corporate greed...
When Milton Friedman Sided With Keynes Over Hayek on Inflation
In an excerpt from his book Samuelson Friedman: The Battle Over the Free Market, Nicholas Wapshott explores the disagreements between Friedman and...
LATEST NEWS
Antitrust and Competition
The Impact of Large Institutional Investors on Innovation Is Not as Positive as One Might Expect
In a new paper, Bing Guo, Dennis C. Hutschenreiter, David Pérez-Castrillo, and Anna Toldrà -Simats study how large institutional investors impact firm innovation. The authors find that large institutional investors encourage internal research and development but discourage firm acquisitions that would add patents and knowledge to their firms’ portfolios, hampering overall innovation.
Antitrust and Competition
The FTC Needs To Focus Arguments on Technological Transitions After High-Profile Losses
Joshua Gray and Cristian Santesteban argue that the Federal Trade Commission's focus in Meta-Within and Microsoft-Activision on narrow markets like VR fitness apps and consoles missed the boat on the real competition issue: the threat to future competition in nascent markets like VR platforms and cloud gaming.
Commentary
We Need Better Research on the Relationship Between Market Power and Productivity in the Hospital Industry
Antitrust debates have largely ignored questions about the relationship between market power and productivity, and scholars have provided little guidance on the issue due to data limitations. However, data is plentiful on the hospital industry for both market power and operating costs and productivity, and researchers need to take advantage, writes David Ennis.
Antitrust and Competition
Debating the Draft Merger Guidelines: Transcript
On September 7, the Stigler Center hosted a webinar to discuss the draft merger guidelines. What follows is a slightly edited transcript of the event.
Commentary
Holding Up the News
Meta has silenced news organizations’ social media accounts in response to Canada’s Online News Act, a law not yet in effect. Josh Braun describes the reasoning behind such legislation, its potential flaws, and how Meta, particularly Facebook, has turned the Canadian wildfire crisis into a regulatory pressure campaign.
