| The research project pursued for this dissertation first assessed various theories of competition and the explicit or implicit theory of competition upon which theories of oligopoly/monopoly are based. Secondly, an assessment of previous empirical research was conducted followed by an empirical analysis of profit rates and markups for the U.S. economy from 1958-77.;The database used was 2-digit input-output data and associated series for five I-O benchmark years: 1958, 1963, 1967, 1972, and 1977. For the 72-sectors, market profit rates, production prices and two types of markups were calculated. Actual markups were calculated from a mapping with market prices and competitive markups corresponded to production prices. Lastly, the differential between the two types of markups was calculated.;Time series for the market rates of profit and the three types of markups were plotted over time for 51 sectors. In addition, these series were plotted versus concentration ratios and capital-output ratios for all the years and for all 51 industries.;Regression analysis was conducted for (1) individual years (2) data averaged over the period 1958-77 and (3) for panel data extending from 1958-77. The dependent variables were market profit rates and differential markups. Several sets of regressors were used to test different model specifications and hypotheses. The main ones being: the concentration--profit rate, and the concentration--entry barrier--profit rate hypotheses, the disequilibrium approach model, and a model combining both market structure and supply and demand variables.;The main results showed that hierarchies of profit rates changed over the twenty year period with 60-70% switching from above average to below average or vice versa. The variables consistently significant (at the 5% level) were capital-output ratios, and concentration ratios.;However, the plots of the concentration ratio revealed that outliers were the basis of the regression result providing counter evidence to the hypothesis that profit rates and concentration are positively correlated. The overall implication of the results is that competition, is still evident in the U.S. economy, in contrast to the claims of 'oligopoly/monopoly' theorists. |
