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What is a good summary of the 2017 De Loecker and Eeckhout paper, "The Rise of Market Power and the Macroeconomic Implications"?

Economics Dec 15, 2020

What is a good summary of the 2017 De Loecker and Eeckhout paper, "The Rise of Market Power and the Macroeconomic Implications"?

Expert Solution

De Loecker and Eeckhout's paper was based on the secular trend such as wage, labour force participation, labour share, labour mobility, migration rates, capital share, and the rate of output growth of past decades. Under this paper, data was collected from publicly listed companies in which all sectors and industries were included for economic analysis. De Loecker and Eeckhout's paper defined producer behaviour using lagrangian function and multiplier with the variable input and capital stock. The main aim of this paper was to focus on market power that was defined by the analysis of time series, cross-sectional analysis, and markup that showed that market power could change with technology, externalities, entry barriers, and consumer behaviour.

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