Policy-makers in Europe must prevent the emergence of excessively powerful firms or face serious economic risks, according to the European Central Bank’s chief economist.
Changes in firms’ market power can affect investment and firms’ pricing behaviour, and also “productivity growth and, therefore, the natural rate of interest,” Peter Praet told a conference in Luxembourg.
“For a central banker, it is thus of crucial importance to understand whether and how the prevailing level of firms’
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