Concentration and Growth:
A whole raft of posts and articles (here, here, here, here) has shown up recently regarding “rent-seeking”. This is kind of a catch-all for increased concentration within industries, more lenient anti-trust enforcement, and the increasing share of corporate profits in output. This is then tied to the slowdown in wages over the last few decades, increasing inequality, and even to slower aggregate growth.
The arguments made by those doing the concentrating and profit-making is that they are promoting efficiency, productivity, and hence growth. Do we know whether concentration or rent-seeking would be good or bad?
I’m going to draw a lot on one of my professors in grad school, Peter Howitt, who along with Philippe Aghion is really one of the godfathers of studying competition and growth. ...