Industrial organisation

Joan Costa-Font, Rosella Levaggi, Gilberto Turati, 20 September 2020

While competition between publicly funded hospitals seems to improve efficiency and the quality of care in ‘normal’ times, during a pandemic certain types of disintegrated hospital competition models can compromise the necessary stewardship of the system, and give rise to a larger number of fatalities. This column presents a regional comparison of the healthcare systems in three Italian regions that were severely hit at the beginning of the Covid-19 pandemic. The analysis suggests that an integrated model can provide a swifter reaction to an outbreak by minimising coordination efforts as well as  information costs.

Natalia Fabra, Massimo Motta, Martin Peitz, 16 September 2020

The COVID-19 crisis has demonstrated the importance of preparing for pandemics and other catastrophic events that require the quick availability of some essential goods and services. Relying only on private incentives and market forces would be insufficient. Instead, governments and preferably supranational institutions should design and implement prevention, detection and mitigation measures. This requires putting in place competitive mechanisms to accumulate essential goods, establishing rationing protocols, and facilitating the ramping up of production when the crisis hits. In particular, public institutions should secure the provision of essential goods in sufficient quantity and quality at a reasonable cost. A new CEPR Policy Insight argues that the economics of electricity capacity markets provides important lessons for such a provision.

Hiromitsu Goto, Yuji Fujita, Wataru Souma, 25 August 2020

The current economic crisis calls for a pandemic-resistant supply chain network in the post-COVID-19 era. This column investigates the Japanese supply chain network at the firm level and discusses its dynamics, resilience, and robustness. It shows that the network can be characterised by a ‘walnut’ structure, with an intricately connected centre surrounded by upstream and downstream components. Despite the maturity of the Japanese economy, the network is actively changing, with fast-growing firms becoming more connected and slow-growing firms moving to the periphery. Fully understanding this structure will be crucial in making supply chain networks resilient to pandemics in the future.

Nestor Duch-Brown, Lukasz Grzybowski, André Romahn, Frank Verboven, 19 August 2020

Does the internet make international markets more integrated? And if not, what can we expect from recent EU policies that promote the Digital Single Market by banning restrictive distribution agreements such as geo-blocking? This column sheds light on these questions using detailed data for consumer electronics markets. The evidence indicates that online distribution channels are not more integrated than traditional bricks-and-mortar channels. Preventing geo-blocking practices would promote integration in the form of reduced international price differences, but this would mainly have distributional effects from consumers in low-income countries to those to high-income countries. 

Teresa Fort, Justin Pierce, Peter Schott, 18 August 2020

Although it is well documented that US manufacturing employment has been falling since 1979, the causes of this trend are still unclear. This column argues that examining how and where the decline in US manufacturing employment occurs provides important insights in this regard. Using US Census Bureau’s Longitudinal Business Database, it highlights three important trends post 1979 which suggest substantial increases in labour productivity, and an evolution of US manufacturing in line with US comparative advantage. 

Other Recent Articles:

Events

CEPR Policy Research