News

Kevin Murphy reflects on his seminal work with the late Michael Jensen, reassessing their influential findings on CEO compensation in light of the dramatic changes in executive pay practices and market conditions since the 1990s. In this piece, Murphy shares the journey of their research collaboration, the challenges they faced, and the evolution of their thoughts on executive compensation.

Knut Bergmann and Matthias Diermeier discuss the economic origins and developments of Germany’s right-wing Alternative for Germany party and how the party’s rise reflects, in part, voters’ concerns that mainstream parties are failing to protect the future of Germany’s vibrant manufacturing sector.

Luis Braido builds on Eric Posner and Carl Shapiro’s debate about the role of economics in merger review by further exploring the tension between efficiency and consumer welfare. He argues that efficiency merits endorsement as it boosts productivity, wealth, and social welfare. Nevertheless, he acknowledges that the law favors competition and consumer welfare over efficiency. From his perspective, enlarging the range of remedies available in merger review is central for protecting productivity gains while preserving competition and compensating consumers for adverse impacts.

Academics have argued that changes in product markup trends show that the European markets, abetted by the adoption of the Single Market and stronger antitrust enforcement, have become more competitive over the last half-century, whereas American markets have become more concentrated. In their research, Tommaso Crescioli and Angelo Martelli argue that a study of labor market power in Europe muddles this picture of higher competition in Europe.

Single-name credit default swaps help investors manage risk, but the 2023 financial crisis showed how these opaque derivatives can suddenly throw financial markets into turmoil. Randy Priem argues that mandatory central clearing, which some authorities have suggested as a solution to managing this risk, is not the holy grail solution they believe it to be.

Local governments in the United States spend trillions of dollars each year delivering essential services and infrastructure, with enormous implications for our economy and quality of life. Chris Berry and Justin Marlowe examine the links between municipal governance structures and fiscal outcomes, revealing the state of municipal finances today.

Louise Tillin explores the sources of populism in India, its recent developments, and what this means for the country’s 2024 general election, which begins April 19 and ends June 1.

The Department of Justice is rumored to be planning to sue Live Nation-Ticketmaster for monopolizing markets for live events. Diana L. Moss explores what potential remedies the government might pursue to address competitive harms in markets such as ticketing for concert venues and sports arenas, and ticket resale, including the viability of breaking up the company.

In new research, Yonghong An, Michael A. Williams, and Mo Xiao find that increases in an academic journal’s subscription price and its publisher’s market share leads to fewer article citations, hindering knowledge creation and research collaboration.

The following is an excerpt from the book, Balance of Power: Central Banks and the Fate of Democracies, by Éric Monnet.