HERBERT J. HOVENKAMP, University of Iowa - College of Law
Email: herbert-hovenkamp@uiowa.edu

Joseph Schumpeter's vision of competition saw it as a destructive process in which effort, assets and fortunes were continuously destroyed by innovation. One possible implication is that antitrust's attention on short-run price and output issues is myopic: what seems at first glance to be a monopolistic exclusionary practice might really be an innovative enterprise with enormous payoffs in the long run. While this may be the case, three qualifications are critical. First, one must not confuse the prospect of innovation with the scope of the intellectual property laws; their excesses and special interest capture cast serious doubt on the proposition that they are any better at fostering innovation than antitrust is. Second, for many antitrust practices positive innovation effects are difficult to foresee even on Schumpeter's own expansive and nonmathematical terms. Third, many antitrust violations serve to restrain rather than promote innovation.

NIKOLAUS WOLF, London School of Economics - Centre for Economic Performance (CEP), The University of Warwick, Dept. of Economics and CSGR, Centre for Economic Policy Research (CEPR), CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Email: nikolaus.wolf@warwick.ac.uk

When did Germany become economically integrated? Within the framework of a gravity model, based on a new data set of about 40,000 observations on trade flows within and across the borders of Germany over the period 1885 - 1933, I explore the geography of trade costs across Central Europe. There are three key results. First, the German Empire before 1914 was a poorly integrated economy, both relative to integration across the borders of the German state and in absolute terms. Second, this internal fragmentation resulted from cultural heterogeneity, from administrative borders within Germany, and from geographical barriers that divided Germany along natural trade routes into eastern and western parts. Third, internal integration improved, while external integration worsened after World War I and again with the Great Depression, in part because of border changes along the lines of ethno-linguistic heterogeneity. By the end of the Weimar Republic in 1933, Germany was reasonably well integrated.

LAWRENCE J. WHITE, Stern School of Business, New York University
Email: lwhite@stern.nyu.edu

Over the past two to three decades economics has played an increasingly important role in the development of U.S. antitrust enforcement and policy. This essay first reviews the major facets of U.S. antitrust enforcement and next reviews the ways in which economics -- starting from a low base -- has grown in importance in antitrust. The essay then highlights three antitrust areas in whichthe influence of economics has had the greatest influence: merger analysis, vertical relationships, and predatory pricing. The essay concludes with the identification of four antitrust areas where further economics analysis could have high returns.

ELAINE S. TAN, University of London, Royal Holloway College - Department of Economics
Email: elaine.tan@rhul.ac.uk

We estimate parametric Champernowne distribution functions for corporate assets in the United States to obtain continuous measures of aggregate concentration and corporate inequality. Our series on asset shares of the largest 200 and 500 non-financial firms show that concentration before World War II was the highest during the 20th century, and had been falling since the merger wave of the late 1960s. Inequality among the largest 200 corporations exhibited an inverse U-shaped trend, fluctuating before the 1960s and falling thereafter.

DAVID PRENTICE, La Trobe University - Department of Economics and Finance
Email: d.prentice@latrobe.edu.au

The contributions of innovations, factor endowments and institutions to American industrialization are examined through analysing the rise of the American portland cement industry. Minerals abundance contributed in multiple ways to the spectacular rise of the industry from the 1890s. However, the results of a structural econometric analysis of entry suggests geological surveys, institutions highlighted by David and Wright, played a contributing rather than critical role in the American portland cement industry overcoming incumbent European portland cement and American natural cement producers.