In the modern economy, algorithms influence many aspects of our lives, from how much we pay for groceries and what adverts we see, to the decisions taken by health professionals. As is true with all new technologies, algorithms bring new economic opportunities and make our lives easier, but they also bring new challenges. Indeed, many competition authorities have voiced their concerns that under certain circumstances algorithms may harm consumers, lead to exclusion of some competitors and may even enable firms (knowingly or otherwise) to avoid competitive pressure and collude. In this article, we explain how algorithms work and what potential benefits and harms they bring to competition.
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Ambroise Descamps, Timo Klein and Gareth Shier
Halvor Mehlum and Ragnar Torvik
For a developed market economy, the COVID-19 crisis is a new type of crisis, but such a crisis has parallels with economies at other times, and with crises in many places. We discuss some mechanisms from the traditional macro literature and from the literature on macroeconomics for developing countries. Phenomena such as bottlenecks, rationing, forced savings, production constrained by access to inputs, liquidity constraints, sector heterogeneity, and costs running despite production being shut down, are all permanent phenomena in developing countries. During the COVID-19 crisis, however, they have also emerged as key mechanisms in developed market economies. We discuss some of these well-developed but partially forgotten mechanisms by extending simple textbook descriptions, and we provide some examples of how the effects of policy are changed in a time of crisis.
Robert A. Blecker
This article examines the charge that Thirlwall's law is a theoretical tautology. It shows that a certain approach to empirical testing of that law can sometimes – under conditions analysed here – result in econometric estimates that reflect an approximate identity or ‘near-tautology’. Nevertheless, other methods of empirically testing the law are not subject to the near-tautology critique, and hence the theory itself is not a tautology. Econometric estimates for the US and Mexico reveal that the near-tautology critique applies to data for the former but not the latter; the difference in these results is explained by exactly the reasons discussed here. The article offers an alternative interpretation of Thirlwall's law as implying a benchmark for analysing whether national income, rather than relative prices, is the main adjusting factor in response to current-account imbalances in the long run.