faulker020

So, there's this story going around the econosphere, which says that the economy is being throttled by market power. I've sort of bought into this story . It certainly seems to be getting a lot of attention from top economists. Autor, Dorn, Katz, Patterson and van Reenen have  blamed industrial concentration for the fall in labor's share of income. Now there's a new paper out by De Loecker and Eeckhout blaming monopoly power for much more than that - lower wages, lower labor force participation, slower migration, and slow GDP growth. The paper is getting plenty of attention . That's a big set of allegations. Everyone knows that the U.S. economy has been looking anemic since the turn of the century, and now a growing chorus of papers by well-respected people is claiming that we've found the culprit. Monopoly power could potentially become Public Enemy #1 for economists, the way taxes and unions were in the 70s, and antitrust could become the new silver bullet p...

Via Brad DeLong -- still my favorite blogger after all these years -- I stumbled on this very interesting essay from 2001 , by statistician Leo Breiman. Breiman basically says that statisticians should do less modeling and more machine learning. The essay has several responses from statisticians of a more orthodox persuasion, including the great David Cox (whom every economist should know). Obviously, the world has changed a lot since 2001 -- where random forests were the hot machine learning technique back then, it's now deep learning -- but it seems unlikely that this overall debate has been resolved. And the parallels to the methodology debates in economics are interesting. In empirical economics, the big debate is between two different types of model-makers. Structural modelers want to use models that come from economic theory (constrained optimization of economic agents, production functions, and all that), while reduced-form modelers just want to use simple stuff like linea...