Endogenous Market Structure and Fiscal Policy in an Endogenous Growth Model with Public Capital
AbstractThis paper develops an endogenous growth model with public capital and imperfect competition. In the model, we take into account monopolistic competition of intermidiate sector and endogenous determination of the number of firms in the sector by considering the fixed cost to keep production going. We show that the number of firms in intermidiate sector is affected by fiscal policy. Furthermore, it is demonstrated in the paper that market structure plays a key role in reducing the growth-maximizing tax rate.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 15 (2006)
Issue (Month): 11 ()
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Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- H5 - Public Economics - - National Government Expenditures and Related Policies
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- Molana, Hassan & Zhang, Junxi, 2001.
" Market Structure and Fiscal Policy Effectiveness,"
Scandinavian Journal of Economics,
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- Barro, R.J., 1988.
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RCER Working Papers
130, University of Rochester - Center for Economic Research (RCER).
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- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Robert J. Barro, 1991. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
- Wu, Yangru & Zhang, Junxi, 2000. "Endogenous markups and the effects of income taxation:: Theory and evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 77(3), pages 383-406, September.
- Coto-Martinez, Javier, 2006. "Public capital and imperfect competition," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 349-378, January.
- Futagami, Koichi & Morita, Yuichi & Shibata, Akihisa, 1993. " Dynamic Analysis of an Endogenous Growth Model with Public Capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 607-25, December.
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