The consequences of the US DOJ’s antitrust activities: A macroeconomic perspective

Abstract

Antitrust, Real business cycles, Technology shocks, Markup shocks, Aggregate fluctuations,

A Step Ahead: Competition Policy for Shared Prosperity and Inclusive Growth

“…Analyzing U.S. patent filings from 1953 to 2000, Marinova, McAleer, and Slottje (2005) find that higher levels of civil (but not criminal) antitrust enforcement by the U.S. Department of Justice (DoJ) (as a measure of the seriousness of U.S. antitrust enforcement) lead to a significantly higher number of patent filings (and successful filings) during the following year, suggesting that competition law enforcement boosts innovation. By contrast, Young and Shughart (2010), using VAR (vector autoregression) models, find evidence of antitrust enforcement resulting in transitory reductions in labor productivity (using the index of "output per hour" for U.S. business from the U.S. Bureau of Labor Statistics' Major Sector Productivity and Costs Indices), which they interpret as an indication that DoJ antitrust enforcement actions constitute a negative technology shock. Yet finds essentially the opposite using industry-level data from the United Kingdom from 1954 through 1973.…”

A Personal Remembrance

“…The main lesson of the literature launched by Bob Tollison at the FTC and later on is that antitrust and consumer protection legislation, along with its enforcement, differs only in kind, but not in substance, from other regulatory interventions into the private economy and, hence, is vulnerable to “capture” by the very parties it supposedly is designed to control in the “public's interest.” In line with the logic of collective action (Olson ), consumers rarely, if ever, can be found among the beneficiaries of such intervention. Mackay, Miller, and Yandle (), Shughart (), McChesney and Shughart (), Young and Shughart (), and many other scholarly articles and books exemplify Tollisonian thinking about the intended purposes versus the actual effects of antitrust policy.…”

The New Deal and Modern Memory

“…16 14 Cole and Ohanian (2004) draw similar conclusions with respect to the United Kingdom, the economy of which followed a trajectory from 1929 to 1933 very similar to that of the United States. 15 For a concise summary of the criticisms, along with a valiant attempt to detect empirically one exogenous shock to the real U.S. economy, see Young and Shughart (2010). 16 A more recent contribution to the literature utilizing a DSGE modeling approach (Eggertsson 2008) suggests that America's recovery from the Great Depression was, as result of FDR's election to the presidency in November 1932, a change in expectations on the part of consumers and business owners from deflationary (monetary and fiscal) to inflationary policies.…”