We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by...

We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to measures of profitability and valuation – particularly Tobin's Q, and that this weakness starts in the early 2000's. There are two broad categories of explanations: theories that...

We propose a model to identify the causes of rising profits and concentration, and declining entry and investment in the US economy. Our approach combines a rich structural DSGE model with cross-sectional identification from firm and industry data. Using asset prices, our model estimates the...

We combine a structural model with cross-sectional micro data to identify the causes andconsequences of rising concentration in the US economy. Using asset prices and industrydata, we estimate realized and anticipated shocks that drive entry and concentration. Wevalidate our approach by showing...

We study the entry and exit of firms across U.S. industries over the past 40 years. The elasticity of entry with respect to Tobin’s Q was positive and significant until the late 1990s but declined to zero afterwards. Standard macroeconomic models suggest two potential explanations: rising...