Returns to Scale and Productivity in the Macroeconomy (Anthony Savagar joint with Joel Kariel)

  • Date and time: Wednesday 27 September 2023, 1pm to 2pm
  • Location: In-person only
    A/TB042 (Alcuin Teaching Block - Seebohm Rowntree)
  • Audience: Open to staff, students
  • Booking: Booking required

Event details

Speaker: Anthony Savagar (Kent)

Abstract:  We investigate the puzzle of rising returns to scale but stagnating productivity in several advanced economies. To do this, we develop a model of heterogeneous firms with endogenous returns to scale. We show that growing returns to scale driven by span of control, rather than fixed costs, reduces productivity because it weakens firm selection. Our empirical analysis confirms that productivity and returns to scale are negatively related, and in aggregate returns to scale have increased whilst productivity has weakened. This suggests an important role in recent market structure discussions for technologies that have broadened span of control.

Paper: Returns to Scale and Productivity in the Macroeconomy

About the speaker

Anthony's research covers macroeconomics and industrial organisation. His research looks at how firm behaviour and industrial organisation aggregate to affect macroeconomic dynamics.