Our understanding of the functioning of the US economy has improved

Most recent characteristics of the US economy can be explained from a simple idea: a long period of low interest rates gives rise to greater corporate concentration. This results in the appearance of companies with a dominant position in each sector of activity, both in the goods and services market and in the labour market: Dominant positions in the goods and services market explain the rise in profit margins (the decline in the wage share of GDP) and the low level of productivity gains (companies with monopoly positions do not need to protect themselves with high productivity gains); Dominant positions in the labour market explain the weak wage growth and therefore the low inflation.