Liu, Ernest
[VerfasserIn]
;
Mian, Atif
[Sonstige Person, Familie und Körperschaft];
Sufi, Amir
[Sonstige Person, Familie und Körperschaft]National Bureau of Economic Research
Low Interest Rates, Market Power, and Productivity Growth
Erschienen:
Cambridge, Mass: National Bureau of Economic Research, 2019
Erschienen in:NBER working paper series ; no. w25505
Umfang:
1 Online-Ressource; illustrations (black and white)
Sprache:
Englisch
DOI:
10.3386/w25505
Identifikator:
Reproduktionsnotiz:
Hardcopy version available to institutional subscribers
Entstehung:
Anmerkungen:
System requirements: Adobe [Acrobat] Reader required for PDF files
Mode of access: World Wide Web
Beschreibung:
This study provides a new theoretical result that low interest rates encourage market concentration by raising industry leaders' incentive to gain a strategic advantage over followers, and this effect strengthens as the interest rate approaches zero. The model provides a unified explanation for why the fall in long-term interest rates has been associated with rising market concentration, reduced business dynamism, a widening productivity-gap between industry leaders and followers, and slower productivity growth. Support for the model's key mechanism is established by showing that a decline in the ten year Treasury yield generates positive excess returns for industry leaders, and the magnitude of the excess returns rises as the Treasury yield approaches zero