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We document that central banks are discontinuously more likely to report slightly positive profits than slightly negative profits, especially when political pressure is greater, the public is more receptive to extreme political views, and central bank governors are eligible for reappointment. The propensity to report small profits over small losses is correlated with higher inflation and lower interest rates. We conclude that there are agency problems at central banks, which give rise to discontinuous profit incentives that correlate with central banks' policy choices and outcomes. These findings inform the debate about the political economy of central banking and central bank design. [ABSTRACT FROM AUTHOR]

The literature on competitive effects of common ownership has grown at a fast rate in the past two years. Anticompetitive effects have been confirmed with alternative reduced-form and structural estimation methods, in different industries, geographies, and jurisdictions. Multiple independent studies have disproven early critiques of the literature. Other papers document the heterogeneity of common ownership effects on competition across markets and industries. Important advances were made on the study of the economic mechanisms and governance channels that implement anti-competitive incentives. New theory refines the interpretation of existing empirical work. Access to high-quality ownership and product-market data remains a bottleneck for meaningful research in the area. [ABSTRACT FROM AUTHOR]

This article argues that the evidence presented in several critiques of Azar, Schmalz, and Tecu's (AST) "airlines" paper does often not back the conclusion these studies draw. Specifically, widely circulated studies claiming that there are no anticompetitive effects of common ownership or that there is no evidence of it either do not attempt to refute AST's findings of anticompetitive effects in the U.S. airlines industry or in fact confirm the evidence by AST and even dispel valid concerns about AST's methodology. Focusing on Kennedy, O'Brien, Song, and Waehrer (KOSW), we note that their panel regressions using market-share-free indices of common ownership concentration confirm the positive correlation between common ownership concentration and price, which AST showed with a measure containing potentially endogenous market shares. We then examine the alternative empirical methods KOSW propose: (i) Their conclusion that estimates from a structural model show no evidence of anticompetitive effects is based on an estimation that discards 90% of the available data and therefore, at best, is only valid for that subsample; (ii) their structural model makes no economic sense because it produces a negative effect of route distance on marginal cost; and (iii) they construct an alternative version of the widely used BlackRock- Barclays Global Investors instrument that is arguably invalid. Even absent these methodological concerns, KOSW's structural estimates are so noisy that they do not in fact reject the hypothesis that common ownership concentration has a positive effect on prices. A more recent structural paper by Park and Seo has shown these concerns to be well-founded: using a different and larger subsample of AST's data and more standard estimation methods compared to KOSW, they estimate a positive effect of common ownership on prices, as well as a positive effect of route distance on cost. A lesson for future research—and readers of the literature—is to critically evaluate the conclusions drawn by studies in this field, including those that advertise themselves as providing evidence against the existence of anticompetitive effects of common ownership. [ABSTRACT FROM AUTHOR]

Developments in capital markets have fueled a concentration of horizontal ownership across competing firms, and this has been linked to anticompetitive effects and economic underperformance. The debate about such ownership concentration has proven contentious and controversial. This symposium titled "Common Ownership: Illuminating a Great 21st Century Antitrust Debate" brings together key new works on the topic that confirm, extend, and illuminate the prior empirical findings and policy implications. Among other things, these contributions survey the recent empirical literature, provide new important empirical results about the extent and effect of horizontal ownership, offer a methodological critique, highlight concepts that address core capital market and labor market linkages, and articulate ideas for policy development to tackle emerging contingencies. [ABSTRACT FROM AUTHOR]