I’m Mary Walden, with economist MW, welcoming you to the economic perspective. Today’s program looks at bigger companies and inflation. Mike, there’s evidence that bigger firms are dominating more industries. As I suspect is the case with most of economics, there are probably upsides and downsides to this trend. Please weigh the pluses and minuses for us.
- See bigness everywhere – technology, health care, cell phone companies, entertainment, to name a few – have come about through growth or through mergers and consolidation
- Likely biggest downside – too much control, not only in pricing, but in hiring
- Harder for new firms to break in
- But some upsides
- Larger firms seem to invest more – makes them more productive
- And evidence that if firm is more productive – price increases will be less
- So maybe trading off bigness for lower inflation
- But may become – or already is – a public policy issue
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.