Riccardo De Bonis, Giuseppe Marinelli, Francesco Vercelli, 16 April 2018

There is no consensus on how to measure competition in the banking system, though the 'Boone indicator' of profit elasticity with respect to marginal costs has recently provided reliable results. This column uses a dataset of 125 years of bank balance sheets to calculate this indicator for the Italian banking system. It shows that regulatory changes have driven bank competition, an insight that is supported by other indicators.

Sean Dougherty, Sarra Ben Yahmed, 20 January 2017

Globalisation offers many benefits, some of which cannot be separated from other types of policy. This column examines how the benefits from removing regulations that impede competition are partly contingent on openness to import competition. Using recent firm-level analyses of productivity growth, it argues that those firms that contribute the most to overall growth could also be held back by reduced openness, harming overall advances in incomes.

Florin Bilbiie, Fabio Ghironi, Marc Melitz, 13 September 2016

Structural reform and deregulation are often promoted as ways to lower barriers to market entry. The Dixit-Stiglitz model provides an important benchmark – given specific preferences, there is a constrained-optimal amount of producer entry and product variety. This column reconsiders optimality of product creation, differentiating between consumer-producer and intertemporal inefficiencies and quantifying the welfare costs of inefficient entry. Monopoly profits should be preserved when product variety is endogenously determined by firm entry, as they play a crucial role in generating the welfare-maximising level of product variety in equilibrium.

Giuseppe Bertola, Anna Lo Prete, 28 February 2015

The large international imbalances accumulated in the Eurozone have proven difficult to unwind during the recent Crisis. This column argues that market reforms had a role in generating current account imbalances, and that patterns of relative labour market regulation could be equally important in the aftermath of the Crisis.

Philippe Aghion, 19 January 2015

Jean Tirole’s Nobel was for his transformative work on industrial organisation. In this Vox Talk Philippe Aghion talks about Tirole’s contribution. The interview was recorded in November 2014.

Lee Branstetter, Francisco Lima, Lowell Taylor, Ana Venâncio, 18 September 2014

Business groups and their political allies advocate deregulation as a pathway to faster growth, pointing to a strong negative relationship between regulatory barriers to entry and economic performance. This column argues that cross-sectional estimates have oversold the strength of this relationship and its implications for policy. Quasi-experimental evidence from a Portuguese policy reform shows that deregulation matters, but its impact is limited – it is not the panacea that pundits proclaim it to be.

Ana Fernandes, Priscila Ferreira, L Alan Winters, 09 September 2013

Deregulating firm entry is usually good for firms. But what about their workers? This column presents new research on the deregulation of firm entry and how it affects different types of workers. Using a natural experiment from Portugal, the evidence suggests that deregulating firm entry appears to boost competition and employment (and possibly aggregate income) but its gains seem largely to be reaped by better-off, better-educated workers.

Leonardo Iacovone, Beata Javorcik, Wolfgang Keller, James Tybout, 20 August 2011

The entry of Wal-Mart into Mexico 20 years ago has reshaped the country’s industrial structure. This column argues that the effect has been polarising. While Wal-Mart’s retailing power has helped more productive companies expand their market shares and boost productivity, the retailer’s pressure to lower prices and innovate has pushed down mark-ups and marginalised less capable producers.


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