Since the early 1980s, market power has increased significantly in advanced economies, particularly in the technology and pharmaceutical sectors. This development coincides with a broad-based decline in business dynamism. While not the main driver, the rise in mergers and acquisitions by dominant firms has contributed to the rise in market power. Rising market power also has weakened the potency of monetary and fiscal policies. These issues and the appropriate response by competition policies are the subject of a new Staff Discussion Note from the International Monetary Fund.
On March 15, the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution in Washington, D.C., and Bruegel in Brussels hosted a conversation with Kristalina Georgieva, managing director of the IMF, U.S. Senator Amy Klobuchar (D-Minn.), and Margrethe Vestager, executive vice president of the European Commission, on policy responses to rising market power. This was followed by a panel of economists who specialize in competition and antitrust.