The consequences of economic concentration: declining dynamics in the US economy

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Chapter 3 in The New Corporate Landscape, 2022, pp 88-134 from Edward Elgar Publishing

Abstract: The chapter examines the consequences of oligopolistic tendencies in several market niches, not the least the growth of monopsony and labour marker concentration in certain market niches. Lower labour compensation, lower entrepreneurial activities, and similar well-documented activities are examined, arguably being related to a lower demand in an economy wherein investment in innovations, human resources, and public goods become unattractive, despite (but also causing) low real interest rates. The chapter discusses cheating and rule bending as being related to economic concentration, activities that tend to either reduce economic welfare or to transfer costs to third parties, e.g., consumers. Declining investment appetite and economic concentration can be handled by the sovereign state, subsidizing investments made by qualified economic actors such as corporations, but such political initiative demand a shared view of the current economic conditions. The chapter concludes that economic concentration risk to reduce economic welfare, which in turn calls for new policies.

Keywords: Business and Management; Economics and Finance; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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