Paper on the Increase in Turbulence and Market Power published in The Economic Journal
The paper 'The Increase in Turbulence and Market Power’ by research fellow Agnieszka Markiewicz (Erasmus University Rotterdam) and alumnus Riccardo Silvestrini (University of Naples Federico II, Italy) has appeared in The Economic Journal (February 2026).
The study 'The Increase in Turbulence and Market Power’ by Agnieszka and Riccardo shows that sectoral differences in turbulence can explain heterogeneous increases in market power by accelerating leadership turnover and reallocating market shares toward high-markup firms.
Abstract
In recent decades, market power has been on the rise, although its increase varies between sectors. We argue that this heterogeneity can be partially attributed to sector-specific differences in turbulence dynamics. Turbulence, a measure of firms’ churn over the revenue productivity distribution, reflects firms’ ability to sustain their productivity over time. In a dynamic oligopolistic competition model, an increase in turbulence accelerates the turnover of leaders, and triggers reallocation of market shares towards high-markup firms. The predictions of our model are consistent with empirical evidence from both the United States and Europe.
Article citation
Agnieszka Markiewicz and Riccardo Silvestrini, ‘The Increase in Turbulence and Market Power', The Economic Journal, Volume 136, Issue 674, February 2026, doi.org/10.1093/ej/ueaf059.