Disruption, concentration marks the new economy

The growing dominance of leading technology companies has occasioned an intense debate on the tradeoffs between efficiency and market power, while raising questions about what the changing structure of markets will mean for innovation and the distribution of wealth in the future.

The annual Jackson Hole Economic Policy Symposium in Wyoming, United States, organized by the Federal Reserve Bank of Kansas City, offered an excellent set of papers and commentators on the subject.

With respect to efficiency and competition, there is already cause for concern. John Haltiwanger of the University of Maryland has shown that the entry rate of new enterprises into the market has fallen sharply, particularly over the past 12 years. And Jay Ritter of the University of Florida has demonstrated a similarly steep decline in annual initial public offerings.