Industrial organisation

Frank Pisch, 30 June 2020

The Covid-19 pandemic has re-opened debate about the merits and drawbacks of highly coordinated global supply chains in manufacturing. This column documents the economic relevance, geographical properties and ownership structure of French manufacturing firms in international just-in-time supply chains – as well as potential implications for global value chains in a post-Covid-19 world. Just-in-time supply chains are likely to become more prevalent, contribute to further regionalisation of international trade, and generate an increase in multinational production.

Anton Pichler, Marco Pangallo, R. Maria del Rio-Chanona, François Lafond, J. Doyne Farmer, 07 June 2020

Many governments are slowly unwinding their economies from nationwide lockdowns. However, re-opening the economy entails a serious trade-off between fostering economic output and keeping the spread of infection low. This column reports several re-opening scenarios for the UK economy, documenting their projected impacts on both GDP and the spread of the virus. The results suggest that it is best to re-open upstream industries first, as they provide a large direct and indirect economic boost at a relatively lower cost in terms of further epidemic spreading.

Anna Stansbury, Lawrence H. Summers, 02 June 2020

Since the early 1980s, the US has seen a falling labour share and slow wage growth for typical workers, while measures of corporate valuations and measured markups have increased. A number of papers have argued that increasing monopoly or monopsony power can explain these trends. This column argues instead that the decline in worker power in the US economy is a more compelling explanation for recent macro trends than a broad-based rise in monopoly power.

David Argente, Salome Baslandze, Douglas Hanley, Sara Moreira, 28 May 2020

Patents are at the heart of policies designed to incentivise innovation and productivity growth. In recent years however, while patent activity has skyrocketed, innovation and productivity growth have not. This column collects data on product innovations and links those to their respective patent. While patent filings are found to be followed by product innovations overall, this relationship is much stronger for firms with lower market share.

Kemal Kilic, Dalia Marin, 10 May 2020

In the wake of the Global Crisis, uncertainty in the world economy led many firms to reassess their business models. Rather than relying on global supply chains, an increasing number of firms invested in robots, which prompted a renaissance of manufacturing in industrialised countries. This column argues that changes in the world economy due to COVID-19 make a V-shaped recovery from the coming recession unlikely. Instead, COVID-19 will accelerate the process begun after the Global Crisis by encouraging firms to re-shore activity back to rich countries.

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