How Can Competition Curb Soaring Inflation and the Cost-of-Living Crisis?
ICA‘s hybrid Morning Conference on Competition, Inflation and Cost of Living Crisis
Monday 13th – 08:15-09:45 (10:15-11:45 CEST) | Online and at Harpa, Reykjavik | REGISTER
Inflation is rising sharply in many economies around the world and has led to what is termed “Cost-of-Living Crisis”. Competition has proven to be beneficial as it generally leads to a stronger economy, lower prices, more choices, and better quality of products or services. But has competition and competition law enforcement a role when dealing with or lessening the harm of inflationary shocks? The Biden Adminstration certainly thinks so and has embraced competition policy as a tool to combat soaring inflation.
Pierre Régibeau, Chief Competition Economist at European Commission Director-General for Competition (DG COMP), will address how competition and competition policy can curb increasing inflation and the cost-of-living crisis at this spring morning conference hosted by the Icelandic Competition Authority.
The panel will then discuss this topic and address a related issue of how competition can benefit employees in labour markets.
Experts in the field will be involved in the conference and the ICA is pleased to announce the following panel members:
- Ana Sofia Rodrigues, Chief Economist at Portuguese Competition Authority
- Ásgeir Jónsson, Governor of the Central Bank of Iceland
- Martin Gaynor, Professor of Economics, Carnegie Mellon University
- Pierre Régibeau, Chief Competition Economist at DG Competition
- Chair: Valur Þráinsson, Chief Economist at the Icelandic Competition Authority
Attendees can take part either in person at Harpa and enjoy a cup of coffee or online through Zoom (link will follow registration).
Please register for the event here.
Agenda:
- 8:00 Breakfast and Coffee
- 8:15 Welcome and introduction | Páll Gunnar Pálsson, Director General at Icelandic Competition Authority
- 8:20 Opening remarks | Lilja Dögg Alfreðsdóttir, Minister of Culture and Business Affairs
- 8:25 Keynote speech | Pierre Régibeau, Chief Competition Economist at DG Competition
- 8:50 Panel discussion
- 9:40 Closing remarks | Sveinn Agnarsson, Chairman of the board of the Icelandic Competition Authority
Information about participants
Ana Sofia Rodrigues Chief Economist and Head of the Bureau of Economic Studies and Market Monitoring of the Portuguese Autoridade da Concorrência (AdC) since October 2015, after a year as Senior Competition Expert at the OECD. Before that, she held various positions at AdC. She holds a PhD in Economics from the University of York (2008).
Ásgeir Jónsson has been the governor of the Central Bank of Iceland since 2019. He received M.Sc. degree in economics from Indiana University in 1997 and Ph. D. degree from the same university in 2001. Before taking on the role at the Central Bank of Iceland Ásgeir was the president of the Economics Department at the University of Iceland.
Lilja Alfreðsdóttir has been a member of the cabinet since 2016 and the Minister of Culture and Business Affairs since November 2021. Prior to her political career Lilja held various positions for the Central Bank of Iceland and the International Monetary Fund in Washington D.C. Lilja holds an M.A. in economics from Columbia University in New York.
Martin Gaynor is the E.J. Barone University Professor of Economics and Public Policy at Carnegie Mellon University and former Director of the Bureau of Economics at the U.S. Federal Trade Commission. Professor Gaynor's research focuses on competition and incentives in health care, and on antitrust policy. Mr. Gaynor received Ph.D. degree from Northwestern University in 1983.
Páll Gunnar Pálsson has been Director General of the Icelandic Competition since 2005. Previously he held positions in public administration, in the fields of industry, commerce, energy, and financial supervision. He is a lawyer by education.
Pierre Régibeau is the Chief Competition Economist at DG Competition. He specializes in the field of Industrial Organisation, law and economics and international business. Dr Régibeau holds a PhD in Economics from the University of California at Berkeley. Since 1987 he has held teaching positions at MIT, Northwestern University, the University of Barcelona, and the University of Essex, where he is currently a visiting honorary professor.
Sveinn Agnarsson is Chairman of the Board of Directors of the Icelandic Competition Authority. He is a full professor in economics at the Faculty of Business Administration at the University of Iceland. Sveinn holds an undergraduate degree in history from the University of Iceland and a PhD in economics from the University of Gothenburg. His research has mainly focused on various aspects of fisheries management and research utilisation, as well as applied microeconomics.
Valur Þráinsson has served as the Chief Economist at the Icelandic Competition Authority since 2019. He holds a B. Sc. in Economics from the University of Iceland, an M. Sc. degree in Economics from the University of Amsterdam with a special focus on IO, regulation and competition policy and a PG Diploma in EU Competition Law from King's College London.
Background
For the last few months inflation has been rising in many economies around the world. Consumer prices in the OECD area rose by 8.8% year-on-year in March 2022, 7.8% in February 2022 in comparison to 2.4% in March 2021. The price hike in March, was its sharpest since October 1988. Around one fifth of OECD countries have recorded double-digit inflation, with the highest rate in Turkey at 61.1% Nevertheless, it seems that inflation has not reached its peak. The Bank of England released updated forecasts in the beginning of May 2022 that inflation will top 10% later this year, the Icelandic Central Bank finds the outlook is for inflation to rise above 8% in Q3/2022 and similar developments can be seen around the world.
These developments have also been referred to as a "cost of living crisis", since high inflation, while wages do not follow prices, leads to a fall in real disposable income, which can have a severe effect on consumers.
Competition enforcement is not usually considered a tool that is suited to address short-term monetary or macro-economic issues. However, it is widely recognised that robust competition in markets is one of the most important prerequisites for a strong and stable economy. In line with this, oligopolistic markets and lack of competition can adversely affect the economy as a whole.
In this respect, the Biden administration has emphasised that competition policy should be used to combat soaring inflation, demanding authorities to strengthen its competition policy, especially in areas of the economy where there has been less competition and more consolidation.
Furthermore, it is widely recognised that competition can benefit employees. National competition authorities in Europe, the European Commission and US antitrust authorities have intervened in markets where anti-competitive mergers or agreements would have harmed workers.
These facts show that there is a need for an open discussion about how competition and competition policy can be of use to curb soaring inflation and/or fall in real disposable income.