Seminar in Development Economics

David Atkin (MIT): The Incidence of Distortions

Abstract: Economic distortions—such as market power, taxes, credit constraints, etc.—are
fundamental in understanding income differences across countries. Recent work has
documented the pervasive extent of economic distortions and how they lead to substantial aggregate productivity loss. Far less well understood is how these phenomena
affect members of society differently. In this paper we combine unique datasets from
Chile, linking workers and owners to firms, firms to each other, firms to consumers,
and firms and consumers to the government, in order to quantify the incidence of
distortions for the first time

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