The Consequences of the US DOJ's Antitrust Activities: A Macroeconomic Perspective

20 Pages Posted: 13 Sep 2007

See all articles by Andrew T. Young

Andrew T. Young

Texas Tech University - Rawls College of Business

William F. Shughart

Huntsman School of Business; The Independent Institute


Do the antitrust law enforcement activities of the US Department of Justice act as exogenous "technology shocks", an essential element of real business cycle theory that hitherto has eluded direct empirical corroboration, or as "markup shocks" limiting market power and promoting economic expansion? We analyze annual time series data from 1947 to 2003 on three measures of federal antitrust intervention: the ratio of the Antitrust Division's budgetary expenditures to GDP as well as the numbers of civil and criminal antitrust cases instituted. The evidence suggests that changes in the levels of these policy variables act like negative technology shocks to productivity growth. Moreover, the negative effects are found to be transitory; antitrust policy generates no subsequent offsetting (net) increases in productivity.

Keywords: Antitrust, Real Business Cycles, Technology Shocks, Markup Shocks, Aggregate Fluctuations

JEL Classification: E32, K21, L40

Suggested Citation

Young, Andrew T. and Shughart, William Franklin, The Consequences of the US DOJ's Antitrust Activities: A Macroeconomic Perspective. Public Choice, Forthcoming, Available at SSRN:

Andrew T. Young (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

William Franklin Shughart

Huntsman School of Business ( email )

3565 Old Main Hill
Logan, UT 84322-3565
United States

The Independent Institute ( email )

100 Swan Way
Oakland, CA 94621-1428
United States


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