Market economies are characterized by the so-called “creative destruction” where unproductive incumbents are pushed out of the market by new entrants or other more productive incumbents or both. A byproduct of this up-or-out process is the creation of higher-paying jobs and reallocation of workers from less to more productive firms. The U.S. economy has been losing this business dynamism since the 1980s and, even more strikingly, since the 2000s. Similar patterns are observed in many other countries. This talk will summarize the empirical findings on market power and business dynamism, make an attempt to understand potential common forces behind these empirical regularities and discuss their policy implications.
Ufuk Akcigit is the Arnold C. Harberger Professor of Economics at the University of Chicago. Prior to joining faculty in 2015, he was an Assistant Professor at the University of Pennsylvania. He earned his Ph.D. in Economics from Massachusetts Institute of Technology in 2009. Akcigit is also a Research Professor at Halle Institute for Economic Research, a Senior Research Fellow at Brookings Institute, an elected Research Associate at the National Bureau of Economic Research, and a Distinguished Research Fellow at Koc University. As a macroeconomist, his research centers on economic growth, technological creativity, innovation, entrepreneurship, productivity, and firm dynamics. His research has been repeatedly published in the top economics journals, cited by numerous policy reports and the popular media. The contributions of Akcigit’s research have been recognized by the National Science Foundation with the CAREER Grant (NSF's most prestigious award in support of early-career faculty), Kaufmann Foundation's Junior Faculty Grant, and Kiel Institute Excellence Award, among many other institutions. In 2019, Akcigit was named the winner of the Max Plank-Humboldt Research Award (endowed with 1.5 million euros and aimed at scientists with outstanding future potential). In 2021, he was awarded the prestigious Guggenheim Fellowship.
Meghana Ayyagari is Professor of International Business and Finance at the George Washington University School of Business. Her recent research focuses on the role of intangible investment and human capital in the rise of star firms. She has also worked on how institutions help facilitate financial inclusion in developing countries. Her research interests are in international corporate finance, with a focus on the theory of the firm and the role of institutions on firms, innovation, and entrepreneurship. Ayyagari’s academic research has been published in the Review of Financial Studies, Review of Finance, and the Journal of Financial and Quantitative Analysis. She is an associate editor of the Journal of Banking and Finance.
Norman Loayza is Director of the Global Indicators Group at the World Bank. Previously, he was a Lead Economist in the Development Research Group and managed the Asia hub of the Research Group, based in Malaysia. He was director of the World Development Report 2014 “Risk and Opportunity: Managing Risk for Development”. His research has dealt with various areas of economic and social development, including macroeconomic management, economic growth, microeconomic flexibility, private and public saving, financial depth and stability, natural disasters, and crime and violence. His advisory experience at the World Bank has also ranged across different topics in various regions and countries.
