{"id":8206,"date":"2020-08-19T16:20:57","date_gmt":"2020-08-19T22:20:57","guid":{"rendered":"https:\/\/www.zmetro.com\/?p=8206"},"modified":"2020-08-19T16:20:57","modified_gmt":"2020-08-19T22:20:57","slug":"monopoly-power-lies-behind-worst-trends-in-u-s-fed-study-says","status":"publish","type":"post","link":"https:\/\/www.zmetro.com\/?p=8206","title":{"rendered":"Monopoly Power Lies Behind Worst Trends in U.S., Fed Study Says"},"content":{"rendered":"

Craig Torres<\/a>:<\/p>\n

The concentration of market power in a handful of companies lies behind several disturbing trends in the U.S. economy, like the deepening of inequality and financial instability, two Federal Reserve Board economists say in a new paper.<\/span><\/p>\n

Isabel Cairo and Jae Sim identify a decline in competition, with large firms controlling more of their markets, as a common cause in a series of important shifts over the last four decades.<\/span><\/p>\n

Those include a fall in labor share, or the chunk of output that goes to workers, even as corporate profits increased; and a surge in wealth and income inequality, as the net worth of the top 5% of households almost tripled between 1983 and 2016. This fueled financial risks and higher leverage, the economists say, as poorer households borrowed to make ends meet while richer ones shoveled their wealth into bonds — feeding the demand for debt instruments.<\/span><\/p>\n

\u201cThe rise of market power of the firms may have been the driving force\u201d in all of these trends, Cairo and Sim write in the<\/span> <\/span><\/span>paper<\/a>. Published this month by the non-partisan Fed Board staff, which doesn\u2019t reflect the views of governors, it\u2019s the latest in a series examining the risks that weaker competition poses to a market economy.<\/span><\/p>\n

That issue is increasingly prominent on the agenda of both America\u2019s main political parties. Democrats said in a recent summary of policy priorities that they\u2019re \u201cconcerned about the increase in mega-mergers and corporate concentration across a wide range of industries.\u201d The Department of Justice under President Donald Trump is probing large technology<\/span> <\/span><\/span>platforms<\/a>.<\/span><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Craig Torres: The concentration of market power in a handful of companies lies behind several disturbing trends in the U.S. economy, like the deepening of inequality and financial instability, two Federal Reserve Board economists say in a new paper. Isabel Cairo and Jae Sim identify a decline in competition, with large firms controlling more of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/8206"}],"collection":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8206"}],"version-history":[{"count":1,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/8206\/revisions"}],"predecessor-version":[{"id":8207,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/8206\/revisions\/8207"}],"wp:attachment":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}