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Mish’s International Financial Trend Analysis

Business & FinanceWelcome to the Office of Enterprise and Finance. Robin Hanson and Karl Smith both have posts responding to De Loecker and Eeckhout’s paper and attacking the Market Power Story. Each give explanation why they assume rising markups indicate monopolistic competition, rather than entry boundaries. However each appear to forget that monopolistic competition causes deadweight loss Simply because it has the word “competition” in it does NOT imply that monopolistic competitors is efficient. It isn’t.

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