The Increase in Turbulence and Market Power

Agnieszka Markiewicz and Riccardo Silvestrini

The Economic Journal, 2026, vol. 136, issue 674, 507-559

Abstract: In recent decades, market power has been on the rise, although its increase varies between sectors. We argue that this heterogeneity can be partially attributed to sector-specific differences in turbulence dynamics. Turbulence, a measure of firms’ churn over the revenue productivity distribution, reflects firms’ ability to sustain their productivity over time. In a dynamic oligopolistic competition model, an increase in turbulence accelerates the turnover of leaders, and triggers reallocation of market shares towards high-markup firms. The predictions of our model are consistent with empirical evidence from both the United States and Europe.

Date: 2026
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