The government’s approach to antitrust violations is due for an overhaul. And unfortunately, there’s more than enough evidence to conclude that a substantial portion of the U.S. economy suffers from a lack of competition. Enquiries on the LSE SU Economics Essay Competition should be sent to economics@lsesu.org. Health economics is a crucial dimension of global health delivery. ** Browse through our Economics Concentrator Guide. It is time for antitrust authorities to renew their scrutiny of traditional mergers. Below is a list of in-print works in this collection, presented in series order or publication order as applicable. His research focuses on macroeconomics, finance, and labor economics. That’s more worrisome, Haltiwanger says, because it portends slower productivity growth. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. In the U.S., the rate of birth of new firms (as a percentage of all firms) fell from above 13% in the late 1980s to around 8% in 2015, according to the most recent official data. Ten years ago, the top four U.S. airlines collected 41% of the industry’s revenue. By 2017, competition among wireless carriers was so stiff that Federal Reserve Chair Janet Yellen cited falling prices for cell phone service as a cause of low inflation. At last count, 22% do. The notion was to spur competition and lower prices, discouraging the practice of some audiologists of bundling an exam with the purchase of a hearing aid. The National Economics Challenge (NEC) is the country’s only economics competition of its kind for high school students. He has published five books and edited many more. Course description. In fact, in a dramatic change from the late 1990s, the Organization for Economic Cooperation and Development says the U.S. now regulates product markets more heavily than many developed economies including Australia, Canada, France, Germany, and Japan. Using data for all publicly traded U.S. firms from 1950 to 2014, Jan De Loecker of Princeton and Jan Eeckhout of University College London found that markups rose from about 18% in 1980 to 67% in 2014. How does this rise in cross-ownership by institutional investors affect competition? Critics also take issue with Schmalz’s methods, pointing out that the research relies on the way money managers are required to report holdings, which combines shares held for all sorts of clients. With waning competitive pressure, productivity growth slows, wages stagnate, and the gap between winners and losers widens. RedBall Project by Kurt Pershke; Photography by Brit Worgan. And regulators need to pay more attention to protecting economic vitality and consumer well-being—and less to industry lobbyists. Ultimately, curing what ails the U.S. economy requires political commitment and resolve to protect the robust competition that spurs productivity growth and improves American living standards, even when well-resourced interests resist. I study the economics of competition and other topics in industrial organization using a combination of theory and data. When SABMiller and MolsonCoors (the number two and three brewers at the time) combined U.S. operations, in 2008, prices abruptly rose — and not only for their beers but also for those of competitor Anheuser-Busch. Innovation superstars like Google have created winner-take-most markets largely by exploiting network effects, not through predatory behavior. By 2012, Amazon had begun raising prices and had slashed the benefits of Amazon Mom. There’s no question that most American industries have become more concentrated. In a healthy economy, companies continually are born, fail, expand, and contract, while new jobs are created and others are destroyed. The Ph.D. This was dubbed “the Walmart effect,” because of the impact of the giant retailer not only on the efficiency of its industry but on the entire U.S. economy. Recent research by the University of Michigan’s Martin Schmalz and colleagues argues that cross-ownership discourages big companies from competing aggressively against one another. ", The Agenda for the Next Generation of Health Care Information Technology, A Recovery Squandered: The State of U.S. Competitiveness 2019, NEJM Catalyst Innovations in Care Delivery. And regulators need to pay more attention to protecting economic vitality and consumer well-being — and less to industry lobbyists. This thinking solidified under the Reagan Justice Department, and for better or worse, the antitrust authorities stood by over the coming decades as the economy grew more concentrated. These include Business Economics, Political Economy and Government, Public Policy, and Health Policy. John Haltiwanger, a University of Maryland economist, notes that the decline in dynamism in the U.S. originated in the retail sector in the 1980s and 1990s. Michigan requires 1,460 days of training for athletic trainers, but only 26 days for emergency medical technicians. You must take and pass this online exam before registering for ECON S-1010, S-1012, or S-1123. Despite their undeniable popularity, Apple, Monopolies and Tech Giants: The Insights You Need from HBR. Alberto Alesina was a leader in the field of Political Economics and has published extensively in all major academic journals in economics. regulators and policymakers have more work to do. Rather, it’s the combined effect of size, concentration, and, importantly, incumbent-friendly regulation on the healthy competition that propels economic growth. Much of the increase is a result of states extending the occupations for which licenses are required. Once those protections expire, however, prices theoretically should fall as makers of generics enter the market. If we’re slow to take action to bolster competition — perhaps because incumbents successfully wield their power or because of a distaste for regulation of any sort — we risk diluting the dynamism of the economy and restricting the flow of innovations and new ideas, darkening the prospects for our children and grandchildren. And they cite anecdotal evidence undermining the notion that institutional holders are reluctant activists: For example, in the 2017 showdown between Procter & Gamble and activist Nelson Peltz, Vanguard sided with P&G, while State Street and BlackRock voted almost all their shares for Peltz. Team A, which consisted of seniors Allen Haugh, Spencer Buzdon, Chris Ware and junior Dylan Suffredini, placed first out of 35 four-person teams representing 22 schools from across the country. A wave of hospital mergers and consolidations across the country, driven in part by a push for better coordination of care and greater efficiency, has strengthened hospitals’ bargaining power relative to insurers’ without much sign of the hoped-for benefits in productivity. The team had their best-ever showing at the Harvard Pre-collegiate Economics Challenge (HPEC) last Saturday, with their A team making the finals and placing second in a field of 63 teams from around the world. Of the 893 industries it examined — from dog food and battery makers to airlines and credit cards — two-thirds had grown more concentrated since 2007. Creating a category of “dental therapists” to provide some routine services “could benefit consumers by increasing choice, competition and access to care, especially for the underserved,” the FTC said. We accept APA, Harvard, Chicago, MLA, and any other common citation method. How about when a big firm swallows a tiny firm that might have grown into a mighty oak? “Although provider concentration could produce efficiencies that benefit purchasers of health care services, the evidence does not point in that direction,” Berkeley’s Brent Fulton concludes in a 2017 review of the literature. Are companies that rise to the top “heroes” or “villains”? In determining whether competition is on the decline, a review of prices by some researchers yields an inconclusive result. Harvard Kennedy School Library The HKS Library specializes in supporting research in politics, public policy, international development and other social science/business/economics topics of interest to the Harvard Kennedy School community. Take the pharmaceutical industry. In theory, location should no longer be a source of competitive advantage. Consider Amazon’s alleged use of below-cost pricing to pressure and ultimately acquire a potential competitor. After the e-commerce company Quidsi — the owner of Diapers.com — rejected a 2009 acquisition overture from Amazon, Amazon responded by cutting prices for diapers and other baby products by as much as 30% on its site and rolling out Amazon Mom, which offered discounts and free shipping. So are industry leaders heroes or villains? Others, however, point fingers internally to some of Harvard… Gabriel Chodorow-Reich is an assistant professor of economics at Harvard. And that does happen — sometimes. Despite the proliferation of craft breweries, two producers dominate the U.S. market: Anheuser-Busch InBev (Beck’s, Budweiser, Corona, Michelob, Stella Artois) and MillerCoors (Blue Moon, Coors, Miller, Molson). Recent research suggests that the average markup — the difference between the prices firms charge and products’ marginal cost — is rising in American business, and rising fastest for the most profitable firms. Take airlines. The exam will not take place in-person on the Harvard campus this summer. Harvard Business Review 76, no. His research lies primarily within this field, and studies how firms bargain, contract and form supply relationships in imperfectly competitive markets. CHANGES TO 2020 REGISTRATION GUIDELINES. Today, profits are up in industries in which a shrinking number of players have a growing share of the business. Copyright © President & Fellows of Harvard College, "Clusters and the New Economics of Competition. The government’s approach to antitrust violations is due for an overhaul. In 1980, only 10% of U.S. public companies had institutional investors that held 5% or more of their shares while simultaneously holding shares in rival firms in the same industry; in 2014, 60% did. As writer Mark Rogowsky recounted in Forbes, “Within a year, T-Mobile hired John Legere as its new CEO and he threw out the business-as-usual approach. The promise of a generous payout is a huge incentive to innovative entrepreneurs. Lawyer-judges Robert Bork and Richard Posner and Nobel laureate economists George Stigler and Oliver Williamson laid the intellectual foundation for this shift, which spread to the policy arena and the courts in the early 1980s. Harvard Business School ... competition (15) competitive advantage (22) competitive strategy (34) complexity (8) conflict (6) ... economic development (21) economic history (3) economic institutions (19) economic sociology (6) economics (23) economics of design (7) education (17) Previously, I was a postdoctoral scholar at the John F. Kennedy School of Government and Harvard Business School. The 2017 settlement allows Hikma to begin marketing the generic version only after January 1, 2023. The most famous examples are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. In 2011, AT&T sought to acquire a struggling competitor, T-Mobile USA, in a $39 billion deal that would have reduced the number of major competitors in the industry from four to three. Over the past few years, the economics team has participated at a number of competitions. Visualize global trade data and economic growth opportunities for every country In an eyebrow-raising 2017 study, Princeton’s Alan Krueger and Orley Ashenfelter found that 58% of major chains (Burger King, Jiffy Lube, H&R Block, and dozens more) restrict and sometimes prohibit one franchisee from hiring workers away from another, to the obvious detriment of people seeking to change jobs. Lately, though, declining dynamism has spread to the tech sector. Critics argue that index funds by design hold stakes in large numbers of companies—some of which compete with one another, some of which buy and sell to one another. Browse the latest online economics courses from Harvard University, including "Energy Within Environmental Constraints" and "Tackling a Perfect Storm: COVID-19’s Economic Impacts and Crafting an Effective Policy Response." Harvard has several PhD programs that may also be of interest to students considering applying to the PhD program in economics. 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