Is Aggregate Market Power Increasing? Production Trends Using Financial Statements

Recent work in macroeconomics argues that firm market power dramatically increased since the 1980s. Using financial statement data, I find that public firm markups increased only modestly over this time period, and are within historical variation. These estimates improve on earlier work by accounting for marketing and management expenses, which I document are a rising share of costs in firm production. Markups are increasing in firm size and vary by sector. Reasonable calibrations accounting for the representativeness of public firms show a flat or even decreasing aggregate markup.