The Innovation and Diffusion Podcast S3 E3: The Great Reversal, Europe and the US with Thomas Philippon from NYU Stern
Jan 21, 2026
Join Thomas Philippon, a finance professor at NYU Stern and author of The Great Reversal, as he dives into the nuances of market dynamics. He discusses his academic journey from physics to economics and the impact of rising corporate concentration on labor shares. Thomas debates whether high profits spur innovation or signal weakened competition, especially in tech. He analyzes the contrasting productivity trends between the US and Europe and shares insights on the future of regulation and research in economics.
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From Physics To Economics Over Social Concerns
- Thomas Philippon switched from physics to economics late in his undergraduate career driven by social concerns.
- He focused on unemployment and wrote his master's dissertation on minimum wages and unemployment.
Internet Cuts Costs But Can Concentrate Power
- Internet reduced some search and fixed costs but also created scale advantages that can increase concentration.
- The net effect on competition is ambiguous and must be evaluated empirically sector by sector.
Profit Surge Drives Falling Labor Share
- Rising after-tax corporate profits explain much of the falling U.S. labor share.
- This profit surge is larger in the U.S. than in Germany or France, so cross-country forces matter.
