Effects of Competition Policy on Macroeconomic Outcomes

Abstract

This paper examines existing empirical research regarding the importance of competition and competition policy for variables relevant to macroeconomic outcomes. This research provides evidence on the correlations between competition, competition policy, and macroeconomic outcomes, such as productivity, growth, innovation, employment, and inequality. Competition policy is demonstrated to bring multiple benefits for macroeconomic outcomes in several economic studies. Gains from enhanced competition can essentially be divided into efficiency and redistribution effects. Efficiency gains result from the positive impact of competition on productivity growth, which allows firms and industries to produce more and better products and services at lower cost, whereas redistribution effects are associated with the impact of competition on inequality and employment in the market.