The global economy is constantly growing and changing. Currently, the economy is being dominated by large companies and online industries. In his article “Are Superstar Firms and Amazon Effects Reshaping the Economy?”, Neil Irwin analyzes the effects of these online business and large industries. These problems are relevant because wages, growth, and inflation have remained low due to these dominating businesses.
Economists are becoming more aware of the fact that large firms and online businesses are taking over the economy. They are looking at things like “monopsony-the outsize of power of a few consolidated employers” and “the Amazon effect”, whether price swings by online retailers cause inflation. These economists also predict that wages should be rising, when in reality they are not. However, keeping interest rates low might increase worker pay. However, instead of making policy actions, economists are simply trying to understand the facts first.
This article is significant because the way that companies exert their power has a large influence on the state of the global economy. As seen in this article, large industries often result in slow investment spending and low wage growth. The concentration of these corporate powers is making it more difficult for the central banks to ensure the well being and health of the economy.
Irwin, Neil. “Are Superstar Firms and Amazon Effects Reshaping the Economy?” The New York Times, 25 Aug. 2018, https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html