TY - JOUR
T1 - Dynamics of Markups, Concentration, and Product Span
AU - Helpman, Elhanan
AU - Niswonger, Benjamin
N1 - Publisher Copyright:
© 2022. American Economic Journal: Macroeconomics. All Rights Reserved.
PY - 2022
Y1 - 2022
N2 - We develop a model with a finite number of multiproduct firms together with a continuum of single-product firms and study the dynamics that arise from product innovation. Consistent with the available evidence, the model predicts rising markups and concentration and a declining labor share. Our dynamics predict the possibility of an inverted-U relationship between labor productivity and product span, for which we provide suggestive evidence. In the optimal allocation, product span and labor productivity are strictly positively related. We also characterize optimal policies for these types of sectors.
AB - We develop a model with a finite number of multiproduct firms together with a continuum of single-product firms and study the dynamics that arise from product innovation. Consistent with the available evidence, the model predicts rising markups and concentration and a declining labor share. Our dynamics predict the possibility of an inverted-U relationship between labor productivity and product span, for which we provide suggestive evidence. In the optimal allocation, product span and labor productivity are strictly positively related. We also characterize optimal policies for these types of sectors.
UR - http://www.scopus.com/inward/record.url?scp=85134367242&partnerID=8YFLogxK
U2 - 10.1257/mac.20200378
DO - 10.1257/mac.20200378
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AN - SCOPUS:85134367242
SN - 1945-7707
VL - 14
SP - 42
EP - 81
JO - American Economic Journal: Macroeconomics
JF - American Economic Journal: Macroeconomics
IS - 3
ER -
