The rise of Trump and an agenda for regulatory reform |
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Authors: | Kaushik Basu |
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Institution: | Department of Economics, Cornell University, Ithaca, NY 14853, USA |
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Abstract: | The arrival of Trump in the White House does not augur well for the long-run prospects of the US economy. The protectionism that is gathering steam under his presidency may yield some short-term gains, but at the detriment of the long-run. Examining the discontent among ordinary voters that brought Trump to power, this paper argues that this should be treated as an opportunity for a major regulatory reform. With the advance of digital technology, we have increasing returns to scale, and that, in turn, is making our antitrust laws backfire and hurt the well-being of ordinary people, thereby sowing discontent. The paper builds a simple model to illustrate this and makes the case for revoking the older antitrust laws and replacing them with some simple profit-sharing rules at the level of the firm, and the economy. |
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Keywords: | Protectionism Antitrust law Increasing returns Price discrimination Profit sharing |
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