Low Interest Rates, Market Power, and Productivity Growth

• 成果类型: Article
• 署名作者: Liu, Ernest; Mian, Atif; Sufi, Amir
• 署名单位: Princeton University; University of Chicago
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA17408
• 发表日期: 2022
• 页码: 193-221
• 关键词: competition; INNOVATION; rise

摘要

This study provides a new theoretical result that a decline in the long-term interest rate can trigger a stronger investment response by market leaders relative to market followers, thereby leading to more concentrated markets, higher profits, and lower aggregate productivity growth. This strategic effect of lower interest rates on market concentration implies that aggregate productivity growth declines as the interest rate approaches zero. The framework is relevant for antitrust policy in a low interest rate environment, and it provides a unified explanation for rising market concentration and falling productivity growth as interest rates in the economy have fallen to extremely low levels.