Can an increasing importance of intangible capital explain increases in markups and profits? I use a heterogeneous firm model to show how intangible capital, characterized by fixed costs and uncertainty, is related to markups and profits at the industry level. The scalability and uncertainty...

In this paper, I use firm-level data from Compustat to document the evolution of markups among listed U.S. non-financial firms during the height of the COVID-19 pandemic (2020-2022). I show that, continuing its long-term rise, the aggregate (sales-weighted) markup rises markedly in 2020 and...