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Monopolistic Competition, Resource Allocation and the Effects of Industrial Policy

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An indicator of allocation effects of industrial policy is derived from a theoretical framework of monopolistic competition. The indicator gives a qualitative picture of how industrial policy affects industry structure and resource allocation, it identifies the policy measures that work as industry assistance under various assumptions about underlying parameters, and it allows a consistent comparison of the assistance effects of different measures. Indicator calculations of industrial policy represent an efficient alternative to numerical general equilibrium analyses, especially in international comparisons. Illustrative indicator calculations of Norwegian industrial policy are presented.

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File URL: http://www.ssb.no/a/publikasjoner/pdf/DP/dp_161.pdf
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Bibliographic Info

Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 161.

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Date of creation: Jan 1996
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Handle: RePEc:ssb:dispap:161

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Keywords: Industry assistance; allocation effects; monopolistic competition; Norway.;

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