Has van Vlokhoven
I am an assistant professor at Tilburg University. My research interests are broadly in macroeconomics. I am particularly interested in long-run dynamics, the macroeconomics of development and firm behavior.
I am involved in the organization of the Tilburg Growth, International macro, Finance and Trade Conference taking place on May 23-24, 2024. For more information, and submission details, please click here.
Working PapersAbstract: A recent literature argues that the rise in aggregate markups is due to economic activity reallocating toward high-markup firms rather than an increase in firm-level markups. I show that standard decomposition methods used to analyze this phenomenon estimate a non-zero reallocation effect even when the allocation is invariant. Theoretically, the sign of this effect can be positive or negative. Empirically, I find that a large and positive reallocation effect is found when the allocation does not change. My results imply that the reallocation effect is smaller than previously thought and perhaps even zero or negative.
Decomposing the Rise in Markups with Measurement Error [SSRN] (April 2023)A rise in the aggregate markup can be decomposed into an effect coming from changes in firm-level markups and an effect coming from reallocation of economic activity toward high-markup firms. I show that such a decomposition is heavily influenced by measurement error of firm-level markups. When firm-level markups are mismeasured the decomposition can give opposite results depending on whether actual or measured markups are used. The data suggests that measurement error has increased over time within Compustat data. Correcting for measurement error lowers the reallocation effect. Moreover, correcting for measurement error also lowers the estimated sales-weighted average markup, and I find that the estimated increase in the sales-weighted markup over the last 60 years in Compustat is for a large part due to this rise in measurement error. The cost-weighted average markup is not affected by idiosynchratic measurement error and is therefore a more robust estimate of market power.
Estimating the Cost of Capital and the Profit Share [SSRN] (December 2023) Conditionally accepted Economic JournalAbstract: Capital costs are not directly observed since most firms own part of their capital stock. I show under which assumptions variation in firms' input choices reveals the user cost of capital. Using Compustat data for the United States, I find that the costs of tangible capital as a share of output have not been increasing while economic profits have been increasing over the past 50 years from around 4% of sales to around 8% of sales. Intangible capital costs have been increasing as well. These results imply that about three-quarters of the fall in the labor share is associated with a rise in profits and the remainder is associated with a rise in intangible intensity. In addition, the markdown in the labor market has not increased. Finally, I study how the distribution of profitability across firms has evolved.Abstract: It is crucial to consider how profits vary over the life cycle of the firm in order to understand why the aggregate profit share has been increasing while firm entry has been declining. All else equal, the more back-loaded profits are, the lower is the value of the firm due to discounting. Therefore, fewer entrepreneurs choose to enter the market, leading to an increase in average profits per firm as market shares are increasing. Under some conditions, this fall in entry also leads to an increase in the aggregate profit share. Empirically, profits have become more back-loaded. Using a quantitative life cycle model of the firm with varying markups I find that this increase in back-loadedness explains between half and all of the rise in profits, and more than fully explains the fall in firm entry.Abstract: I study mitigation policies during an epidemic when individuals vary in their degree of interaction with others. Individuals with a high degree are more likely to contract the disease and, once infected, they transmit the disease to more individuals in expectation. Thus, the presence of high degree individuals fuels the epidemic initially. However, this also means that the high degree individuals are more likely to become immune, and this lowers the reproduction number relatively quickly. That the buildup of immunity is correlated with social interactions has implications for policy. In an SIR model I compare a lockdown in which all individuals are forced to have the same degree with a more liberal policy in which the degree is lowered proportional to the original degree. The lockdown has to be in place longer than the liberal policy to limit the number of deaths to the same extent. The reason is that under the lockdown the high degree agents do not build up immunity faster than the low degree agents. When the policy is lifted, these high degree agents will fuel a second wave of infections. Under the liberal policy, average immunity is the same as under the lockdown, but degree-weighted immunity is larger, leading to a less severe second wave once policy is lifted. I show that the same implications for (optimal) policy hold in a model with economic behavior.
Publications Review of Economic Dynamics (2023), Vol. 49: 269-311 Journal of Informetrics (2019), Vol. 13(2): 751-756 Journal of Financial Stability (2016), Vol. 27: 250-262, with Miguel Ampudia and Dawid Zochowski Media coverage: The Telegraph, Financial Times Alphaville
Research in Progress
Profits and the Marginal Product of Capital Around the World