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Did the National Industrial Recovery Act Foster Collusion? Evidence from the Macaroni Industry

  • Chris Vickers (a1) and Nicolas L. Ziebarth (a2)

We use plant-level data from the Census of Manufactures to study collusion in the United States macaroni industry during the Great Depression. The National Industrial Recovery Act was passed in 1933 to promote recovery through industry coordination of economic activity. While there is no change in the price-cost margin after the law is passed, a variety of markers of anti-competitive conduct suggest that collusion indeed increased. Prices became less responsive to changes in cost, the dispersion of prices decreased, and the persistence in prices increased.

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We thank Joseph Ferrie and Joel Mokyr for helpful comments and funding as well as William Creech at the National Archives. We have also received useful feedback from two anonymous reviewers, Mark Chicu, Rob Porter, and Jason Taylor as well as participants at the EBHS conference in Columbus and the Northwestern Economic History seminar. Mary Hansen helped organize data collection at the National Archives. Doug Bojack, Joanna Gregson, and Dan Thomas helped photograph the original schedules. The Center for the Study of Industrial Organization at Northwestern also provided funding. Ziebarth also thanks the Robert Eisner Memorial and Sokoloff Fellowships for support. All errors are our own.

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