Building Bigger
Factories of Ideas? Big Business and the Golden Age of American Innovation
Pier Paolo Creanza
Princeton Working Paper, November 2025
Abstract:
This paper studies the Great Merger Wave (GMW) of 1895-1904 — the largest consolidation event in U.S. history — to identify how Big Business affected American innovation. Between 1880 and 1940, the U.S. experienced a golden age of breakthrough discoveries in chemistry, electronics, and telecommunications that established its technological leadership. Using newly constructed data linking firms, patents, and inventors, I show that consolidation substantially increased innovation. Among firms already innovating before the GMW, consolidation led to an increase of 6 patents and 0.6 breakthroughs per year — roughly four-fold and six-fold increases, respectively. Firms with no prior patents were more likely to begin innovating. The establishment of corporate R&D laboratories served as a key mechanism driving these gains. Building a matched inventor-firm panel, I show that lab-owning firms enjoyed a productivity premium not due to inventor sorting, robust within size and technology classes. To assess whether firm-level effects translated into broader technological progress, I examine total patenting within technological domains. Overall, the GMW increased breakthroughs by 13% between 1905 and 1940, with the largest gains in science-based fields (30% increase).
How Sociotropic Aesthetic Judgments Drive Opposition to Housing Development
David Broockman, Christopher Elmendorf & Joshua Kalla
University of California Working Paper, November 2025
Abstract:
Voter opposition to new housing development contributes to America's housing shortage. Prevailing explanations for voter opposition emphasize homeowner self-interest and "NIMBY" concerns with new housing's local negative externalities. We argue that sociotropic aesthetic judgments also powerfully shape housing policy preferences, helping explain significant patterns of opposition to housing development. We support this argument with a variety of novel descriptive and experimental findings. Motivating our analysis, we first show that homeowners in already-dense areas are highly supportive of new apartments in their neighborhoods — indeed, more so than in neighborhoods of single-family homes — a pattern prevailing theories cannot easily explain. We then show that measures of aesthetic tastes strongly predict support for dense housing development, as do experimental manipulations which vary the aesthetic quality of new housing — even for housing located far away from the respondent's neighborhood. Other explanations offer more limited explanatory power. Finally, we show how crafting housing policies to be sensitive to voters' aesthetic judgments could help address America's housing shortage.
Debunking NIMBY Myths Increases Support for Affordable Housing, Especially Near Respondents' Homes
Carter Anderson et al.
Journal of Experimental Political Science, forthcoming
Abstract:
Despite general public support, efforts to build affordable housing often encounter stiff resistance due to "not in my backyard" (NIMBY) attitudes, which are often rooted in false or unsupported beliefs about affordable housing and its impacts on surrounding communities. Would correcting these misperceptions increase support for building affordable housing? To answer this question, we conducted a preregistered survey experiment measuring how support for affordable housing in the U.S. varies at different distances from where respondents live (one-eighth of a mile away, two miles away, or in their state). Our results indicate that correcting stereotypes about affordable housing and misperceptions about its effects increase support for affordable housing. Contrary to expectations, these effects are often larger for affordable housing near the respondent's home (rather than at the state level), suggesting that debunking myths about affordable housing may help to counter NIMBY attitudes.
Does Affordability Status Matter in Who Wants Multifamily Housing in Their Backyard?
Michael Eriksen & Guoyang Yang
Review of Economics and Statistics, forthcoming
Abstract:
We provide evidence that similar price effects occur from new multifamily rental housing on surrounding owner-occupied property values regardless of whether the development was subsidized. These effects were on average negative in higher-income communities, but became either non-distinguishable from zero or positive in higher-income communities with sufficient population density. These results imply that previous opposition to all new rental housing by homeowners is misguided as developments could raise property values in some higher-income neighborhoods.
Taming the Growth Machine: The Long-Run Consequences of Federal Urban Planning Assistance
Beau Bressler & Tianfang Cui
NYU Working Paper, November 2025
Abstract:
We study how the federal Urban Planning Assistance Program, which subsidized growing communities in the 1960s to hire urban planners to draft land-use plans, affected housing supply. Using newly digitized records merged with panel data across municipalities on housing and zoning outcomes, we exploit eligibility thresholds and capacity to approve funds across state agencies to identify effects. Planning assistance caused municipalities to build 20% fewer housing units per decade over the 50 years that followed. Regulatory innovation steered construction in assisted areas away from apartments and toward larger single-family homes. Textual evidence related to zoning and development politics further shows that, since the 1980s, assisted communities have disincentivized housing supply by passing on development costs to developers. These findings suggest that federal intervention in planning helped institutionalize practices that complicate community growth, with subsequent consequences for national housing affordability.
The Housing Quality Impact of Source of Income Laws
Paul Hagstrom, Avani Pugazhendhi & David Fenner
Hamilton College Working Paper, April 2025
Abstract:
The study examines an unintended impact, a decrease in housing quality, of efforts to curb discrimination against renters using Section 8 Housing Choice Vouchers (HCVS). Housing vouchers have gained favor as a tool for improving access to affordable and adequate quality housing for lower income renters. While the vouchers are designed to provide property owners with market level rents, property owners' denial rates for voucher holding applicants exceed 40% in some areas in the United States. In response, cities and states have implemented Source of Income (SOI) laws that prohibit discrimination against those wanting to pay with vouchers. We test the hypothesis that SOI laws lower housing quality. We estimate a causal staggered difference in difference model on housing quality using a large sample of rental housing units from the American Housing Survey over a period when cities implemented new SOI policies. Estimates satisfy parallel trend assumptions and indicate that implementing an SOI law at the city level is associated with a statistically significant subsequent decrease in quality for voucher eligible housing units. We then explore several explanations for the observed decrease in quality as owners lose some degree of agency over tenant selection.
The Rise of Market Power and the Macroeconomic Implications: Comment
Lanier Benkard, Nathan Miller & Ali Yurukoglu
NBER Working Paper, November 2025
Abstract:
De Loecker et al. (2020) (DEU) estimate that markups increased significantly in the United States from 1955 to 2016. We find this result is sensitive to unreported sample restrictions that drop 27% of the available observations. Applying the methodology as described in the article to the full sample, markup increases are more muted until late in the sample period, and are almost entirely driven by Finance and Insurance firms. If these firms are removed, markup increases are modest. We conclude that the DEU methodology and data, as they are described in the article, do not support the conclusion that broad-based increases in market power have occurred in recent decades.
The Right To Compute
Gregory McNeal
Pepperdine University Working Paper, December 2025
Abstract:
Computational systems are facing ever-increasing scrutiny and regulation. In 2025 alone, legislatures across the United States introduced more than one thousand bills seeking to restrict artificial intelligence, ranging from bans on algorithmic "medical advice" to pre-clearance regimes for model developers. Yet this surge is merely the latest chapter in a long history of state attempts to govern access to information technologies, from earlier restrictions on encryption and the internet to modern limits on search engines and open-source code. This Article argues that such regulations, though often framed as safety measures, share a distinct constitutional defect: they seek to condition access to the primary instruments of modern inquiry on government approval. Drawing on three strands of jurisprudence, including listener rights (Lamont, Pico), code-as-speech (Bernstein, Corley), and medium neutrality (Packingham), the Article demonstrates that the Constitution protects a fundamental, though under-theorized, interest: the "Right to Compute." This right secures access to the general-purpose computational systems (not just AI models, but the broader infrastructure of programming and analysis) that have become indispensable to thought itself. Consequently, regulatory frameworks that impose topic-based bans or developer licensing function as unconstitutional prior restraints on the cognitive process. To address the growing tension between regulatory efforts and intellectual freedom, the Article develops a presumption of computational liberty. This presumption, rooted in the normative commitment to cognitive freedom, places the burden on the state to justify limits on general-purpose computational tools through strict scrutiny. Because computation increasingly structures how people explore and evaluate ideas, recognizing this right is essential not only for assessing present regulatory conflicts but for maintaining the constitutional connection between the freedom to think and the tools that sustain it.
Some Economics of Artificial Super Intelligence
Henry Thompson
University of Mississippi Working Paper, November 2025
Abstract:
Conventional wisdom holds that a misaligned artificial superintelligence (ASI) will destroy humanity. But the problem of constraining a powerful agent is not new. I apply classic economic logic of interjurisdictional competition, all-encompassing interest, and trading on credit to the threat of misaligned ASI. Using a simple model, I show that an acquisitive ASI refrains from full predation under surprisingly weak conditions. When humans can flee to rivals, inter-ASI competition creates a market that tempers predation. When trapped by a monopolist ASI, its "encompassing interest" in humanity's output makes it a rational autocrat rather than a ravager. And when the ASI has no long-term stake, our ability to withhold future output incentivizes it to trade on credit rather than steal. In each extension, humanity's welfare progressively worsens. But each case suggests that catastrophe is not a foregone conclusion. The dismal science, ironically, offers an optimistic take on our superintelligent future.
Does Regulation Distort Exit Decisions? Evidence from U.S. Power Plants
Lucas Davis & Paige Weber
NBER Working Paper, November 2025
Abstract:
Hundreds of power plants have closed in the United States since 2010, including 130+ gigawatts of coal and 50+ gigawatts of natural gas. In this paper, we highlight the potential for regulation to distort this type of exit decision. Using generator-level data from 2010-2023, we show that regulated units have been 45% less likely to exit than unregulated units. For unregulated units, exit decisions are made based on wholesale electricity prices, ongoing capital costs, and other traditional economic factors. In contrast, owners of regulated units are largely insulated from these factors and, in some cases, have a strong incentive to continue operating capital-intensive equipment. Previous work documents how this regulatory distortion affects investment decisions. Our paper emphasizes that these same incentives affect exit decisions as well.
The Not-So-Uniform Effects of Trade Secret Protection on Business Entry
Asli Leblebicioğlu & Tanseli Savaşer
American Economic Journal: Economic Policy, November 2025, Pages 192-227
Abstract:
We explore the consequences of trade secret protection for new business formation in the United States. We find the states that adopt the Uniform Trade Secrets Act (UTSA), which enhances intellectual property rights, experience an overall decline in firm and establishment entry rates. This result is driven by the reduction in the establishment entry rates of start-ups and small firms. By contrast, the law increases the establishment entry rates of incumbents and larger firms. The negative impact of the UTSA is larger in industries that rely more on intellectual assets and trade secrets, as well as external-finance-dependent industries.