Thursday, October 31, 2019

Have US markets become less free?

NYU economist Thomas Philippon has a new book (summarized here) out examining how a variety of goods have become more expensive in the US than in other countries at the same level of economic development.  Examples include airfares, cellphones, and internet access.  These goods were cheaper in the US than overseas twenty years ago, so what happened?

Philippon blames using monopoly power in the US and a growing commitment to free markets overseas.  The time needed to open a new business in France has shrunk from 53 days to 4.  Most US households face no more than two choices for internet service whereas consumers in France have five or more.  Philippon estimates that growing monopoly power in the US costs consumers roughly $300 a month.

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