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The Financial Times has an interesting story about shifts in the economy that are having critical repercussions, and whether public policy needs to be changed to respond to these shifts.

An excerpt:

“America’s biggest companies are grabbing a swelling share of revenues across major sectors while workers see pedestrian wage growth, teeing up a vexed debate over whether public policy needs to respond.

“So-called superstar companies are becoming increasingly powerful, allowing some to widen the mark-ups they charge on products and services. As these highly profitable businesses become more dominant, workers are capturing a smaller slice of the economic pie, some analysts say, contributing to income inequality.”

Indeed, FT writes, “Economists increasingly agree that some sectors are becoming more dominated by a few big corporate players. A standard measure of corporate concentration — the Herfindahl-Hirschman index — is up 48 per cent since 1996. There has been greater concentration in about 75 per cent of US industries in the past two decades, according to research from academics including Gustavo Grullon of Rice University … As big, highly profitable companies’ power increases, there is a risk the economy may suffer.”

You can read the entire analysis here.
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