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Profiteering and the degree of monopoly in the Great Recession: recent evidence from the United States and the United Kingdom

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  • J. Branston
  • Keith Cowling
  • Philip Tomlinson

Abstract

While the onset of recession may lead some oligopolistic firms to engage in price-cutting behavior, we argue this is likely to be only a temporary phenomenon. As the recession deepens, firms will find themselves with (unplanned) excess capacity, which will increase the mutual benefits of collusion and hence the degree of monopoly is likely to rise. To support this proposition, and adopting a largely heterodox framework, we consider some historical evidence and present some recent data for both U.S. and UK manufacturing and UK retail during the current prolonged slump that has been labeled the "Great Recession." Such behavior has significant implications for economic recovery.

Suggested Citation

  • J. Branston & Keith Cowling & Philip Tomlinson, 2014. "Profiteering and the degree of monopoly in the Great Recession: recent evidence from the United States and the United Kingdom," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(1), pages 135-162.
    • Handle: RePEc:mes:postke:v:37:y:2014:i:1:p:135-162
    DOI: 10.2753/PKE0160-3477370109
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    Citations

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    Cited by:

    1. Eckhard Hein & Petra Dünhaupt & Ayoze Alfageme & Marta Kulesza, 2017. "Financialisation and distribution in three main Eurozone countries from a Kaleckian perspective: the US, the UK and Sweden compared – before and after the crisis," Working Papers 9/17, Sapienza University of Rome, DISS.
    2. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    3. Pitelis, Christos N & Tomlinson, Philip R, 2017. "Industrial organisation, the degree of monopoly and macroeconomic performance – A perspective on the contribution of Keith Cowling (1936–2016)," International Journal of Industrial Organization, Elsevier, vol. 55(C), pages 182-189.
    4. Pedrini, Giulio & Cappiello, Giuseppe, 2022. "The impact of training on labour productivity in the European utilities sector: An empirical analysis," Utilities Policy, Elsevier, vol. 74(C).
    5. Paramjit Singh & Kriti Sharma, 2024. "Degree of Monopoly and Distribution of Income in India’s Organised Manufacturing Sector," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 67(1), pages 129-155, March.
    6. Eckhard Hein & Petra Dünhaupt & Ayoze Alfageme & Marta Kulesza, 2017. "Financialisation and distribution in three main Eurozone countries from a Kaleckian perspective: France, Germany and Spain compared – before and after the crisis," Working Papers 8/17, Sapienza University of Rome, DISS.
    7. Hein, Eckhard & Dünhaupt, Petra & Alfageme, Ayoze & Kulesza, Marta, 2017. "Financialisation and distribution in the US, the UK, Spain, Germany, Sweden and France: Before and after the crisis," IPE Working Papers 85/2017, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    8. Greg Hannsgen & Tai Young-Taft, 2015. "Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model: The Unit of Account, Inflation, Leverage, and Financial Fragility," Economics Working Paper Archive wp_839, Levy Economics Institute.
    9. Rebecca Cleary & Lauren Chenarides, 2022. "Food retail profits, competition, and the Great Recession," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 557-578, July.

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