AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Common Ownership and the Secular Stagnation Hypothesis
AEA Papers and Proceedings
vol. 109,
May 2019
(pp. 322–26)
Abstract
We extend the model in Azar and Vives (2018) to allow for investment and show that higher effective market concentration (augmented by common ownership) leads to lower equilibrium wages, real interest rates, lower output, lower labor share, and lower capital share as well (under a mild condition). We calibrate a multisector sector model of the US economy and find that the rise in common ownership may account for the broad evolution of labor and capital shares in the period 1985-2015 while measured increases in concentration cannot (under plausible values for elasticity parameters).Citation
Azar, José, and Xavier Vives. 2019. "Common Ownership and the Secular Stagnation Hypothesis." AEA Papers and Proceedings, 109: 322–26. DOI: 10.1257/pandp.20191066Additional Materials
JEL Classification
- E25 Aggregate Factor Income Distribution
- E32 Business Fluctuations; Cycles
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence