Jason Furman: belief

Transcript context

…What do you think of the Rossi-Hansberg paper that if you look at the US economy sector by sector, rather than national concentration indices, that there’s no apparent increase in market power? These macro measures of market power are limited and problematic, and that’s something we always knew. We knew that the first time we published them at the Council of Economic Advisers. A lot of the researchers that have published them have known that. The question is, like anything else in economics, does it have predictive power? Does it explain something? Does it work? And it does seem associated with things like profitability, with things like markups at an aggregate level. And some of the aggregate models — it matches features of the data, like the rise in the return to capital relative to the safe rate of return on Treasuries. So is this going to work for every sector? No. Retail, for example — more concentration. In part that’s more competition at the local level. In part that’s more innovation. So in retail, the national numbers, I think, are really misleading. In other sectors, I think they’re not. On balance, I think they’re not. If investment is important, does that make you an economic pessimist, given the apparent end of the savings glut from Asia?…

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