Market power is a ‘puzzle’, BoE team says
Micro and macro evidence do not seem to match up, the authors say
Micro- and macro-level evidence on market power and its impact on monetary policy seems contradictory, according to new research by Bank of England economists.
The working paper, Market power and monetary policy, written by a team including chief economist Andy Haldane, presents empirical evidence on the evolution of market power at the firm level in the UK.
The authors say there is “no clear trend” for market concentration, but market power, measured by estimated price mark-ups, has “clearly
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