I am an Assistant Professor of Finance at Boston College and a Junior Fellow at the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business.


Declining Labor and Capital Shares [Link, Internet Appendix, SSRN Version] Journal of Finance, 75(5): 2421-2463, 2020

Abstract. This paper presents direct measures of capital costs, equal to the product of the required rate of return on capital and the value of the capital stock. The capital share, equal to the ratio of capital costs and gross value added, does not offset the decline in the labor share. Instead, a large increase in the share of pure profits offsets declines in the shares of both labor and capital. Industry data show that increases in concentration are associated with declines in the labor share.


Who's in Favor of Competition? (with José Azar) [Link]

Abstract. We study and classify households whose interests as owners of corporations exceed their interests as workers and consumers and we refer to these households as Capitalists. As households age, they increase their interests as owners (through the acquisitions of corporate assets) and reduce their interest as workers (as they have fewer years left in the labor force). We find that Capitalists make up 30% of the population, earn close to half of all income, and own nearly 80% of the wealth. While they are a minority of the population, Capitalists are far more engaged in the political process and make up a majority of political contributions. Relative to the Forbes 400, we find that the households that we classify as Capitalists are far larger in number, wealth, and political importance.

Value without Employment (with Stavros Panageas) [Link, Slides]

Young firms' contribution to aggregate employment has been underwhelming. However, a similar trend is not apparent in their contribution to aggregate sales or aggregate stock market capitalization. We study the implications of the arrival of ``low marginal - high average'' revenue-product-of-labor firms in a stylized model of dynamic firm heterogeneity, and show that the model can account for a large number of facts related to the decline in ``business dynamism''. We study the long-term implications of the decline in business dynamism on the economy by providing analytical results that connect the decline in dynamism to the eventual decline of consumption.

The Decline of the Labor Share is not Explained by the Capitalization of Intellectual Property Products [Link]

The U.S. labor share has clearly been declining since the early 1980s. This does not depend on whether or not we capitalize intellectual property products. Koh, Santaeulàlia-Llopis and Zheng (2020) approximate the labor share by a single linear time trend over the entire period of 1929--2019. This period includes a long period of time over which the labor share is known to be mostly stable and a shorter period of time over which the labor share is known to decline. Once we separate out the period starting in the 1980s we recover the decline in the labor share.

70 Years of US Corporate Profits (with Seth G. Benzell) [Link]

We extend Barkai (2016) and measure capital costs and profits over the period 1946--2015. The profit share is declining from 1946 to the early 1980s and has been increasing since. As a share of gross value added, profits today are higher than they were in 1984, but lower than their value in the years after World War II. Alternative measures of profits show similar trends. We provide evidence that the measured time trends of profits are not mechanically related to interest rates.


Does Antitrust Enforcement Affect Competition? (with Tania Babina, Jessica Jeffers, Ezra Karger, and Ekaterina Volkova)

This project is support by a grant from the Washington Center for Equitable Growth and U.S. Census Bureau External Project #2090 [Link]

This project will construct a comprehensive database of U.S. antitrust enforcement actions against firms and individuals between 1890 and 2017. The goal is to measure the effect of antitrust enforcement on firm and industry level outcomes. To achieve that goal, the authors will link this database to industry-level economic outcomes and to restricted firm-level tax records from the IRS and the U.S. Census Bureau, including the Economic Census, the Longitudinal Business Database, and the Standard Statistical Establishment List.

M&A and the Rise of Concentration (with Ezra Karger)

This project is supported by the U.S. Census Bureau External Project #2090