Low Productivity Driven By Less Competition?

I have written about the productivity paradox previously.  Perhaps thats why I found this discussion by Torsten Sløk so intriguing. He looks at competition as a key driver of innovation and inventions of new products, and observes that “Maybe one reason why productivity growth remains low is because of the decline in competitive pressures in the US economy.”

His table (below) suggests industry consolidation and concentration is why there is so little productivity gains in some sectors, and larger gains in others:

 

Is_the_slowdown_in_productivity_driven_by_less_com
Source: Torsten Sløk, Ph.D. Deutsche Bank Securities


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