The American economic system has always been the foundation of our national strength. But this foundation is showing cracks—from high levels of income inequality, declining economic mobility, and persistent economic insecurity among low- and middle-income Americans.
A national debate about the strength and fairness of American capitalism is taking place against a backdrop of vast levels of income and wealth inequality, growing pessimism about the state of economic opportunity and mobility, increased market concentration in many sectors, and a precarious fiscal situation.
The essays contained in this volume seek to clarify the lines of debate on some of the greatest economic policy challenges of our time and present evidence- based analysis on how to address them. It examines the hypothesis that growing market concentration is inhibiting a dynamic and competitive economy.
Philippon asserts that growth in aggregate measures of market concentration since the early 2000s is largely attributable to the weakening of competition. Lower levels of competition, Philippon argues, are directly due to lax antitrust enforcement and barriers to market entry.
Rose argues that highly aggregated measures of concentration across industries, which are used in many of the most provocative studies, cannot be used to draw conclusions about concentration dynamics due to a host of methodological challenges. Instead, industry-level studies are necessary to accurately assess causal relationships.
Viard argues that a wealth tax in the U.S. would pose administrative and constitutional challenges. As an economic matter, such a tax would decrease savings and investment, thereby lowering the capital stock, making workers less productive, and slowing wage growth. The potential revenue that would be gained is unclear.
We, the undersigned members of the AESG, have collectively worked at the highest levels of the policy, business, government, academic, and civic communities. We believe that our nation’s economic policies need to be adjusted so that more people participate more fully in our economic success.