I was reading this article in VoxEU, where the authors (one is a Professor of Economics at Harvard University) make the case that an increasing average mark-up has accounted for much of the late productivity growth, since it leads to an increasing allocative efficiency.
However, isn't this exactly the oposite of what one would want? It seems that they are somehow mixing up the possibility of high profits due to one would usually think of as high productivity, with high profits due to market imperfections... Also, it's also as if the authors would defend a higher 'productivity' but at a lower output, than a lower 'productivity' at a higher output.
Here's a quote from the text which I find baffling:
«(...)this reallocation of market share from low- to high-mark-up firms has considerably improved the allocative efficiency of the US economy over the last 20 years. In fact, improvements in allocative efficiency account for about 50% of the cumulated growth in aggregate productivity during this period. This suggests that ‘true’ technological productivity growth has been even slower than previously imagined.(...)A high average mark-up reduces output and depresses the demand for labour and capital, generating low aggregate employment and low aggregate investment. It reduces the aggregate labour and capital shares, and increases the aggregate profit share.»