Does imperfect competition foster capital accumulation in a developing economy?
We analyze the relationship between imperfect competition and capital accumulation in a dual economy, with traditional and modern sectors and two types of agents (workers and capitalists). Workers allocate their time endowment between the two sectors. Capitalistsaccumulate wealth in the modern sector. The economy is open to capital flows, but capitalists face borrowing constraints. Non-competitive behavior of capitalists results in a rent which is extracted from the workers and lowers employment in the modern sector. In the longrun,if capitalists are unconstrained, imperfect competition is beneficial for capital accumulation and growth, while it is detrimental in the converse case. Moreover, not-binding borrowing constraints lead to higher employment and wages. This can motivate the introduction of a subsidy on bequests which allows the economy to reach theunconstrained regime, and is welfare-enhancing for workers.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bourguignon, Francois, 1981. "Pareto Superiority of Unegalitarian Equilibria in Stiglitz' Model of Wealth Distribution with Convex Saving Function," Econometrica, Econometric Society, vol. 49(6), pages 1469-75, November.
- Kiminori Matsuyama, 2000.
Review of Economic Studies,
Oxford University Press, vol. 67(4), pages 743-759.
- Joseph E. Stiglitz, 1967.
"Distribution of Income and Wealth Among Individuals,"
Cowles Foundation Discussion Papers
238, Cowles Foundation for Research in Economics, Yale University.
- Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-97, July.
- Pascal Belan & Philippe Michel & Bertrand Wigniolle, 2007.
"Capital Accumulation, Welfare, and the Emergence of Pension-Fund Activism,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 63(1), pages 54-82, March.
- Pascal Belan & Philippe Michel & Bertrand Wigniolle, 2007. "Capital accumulation, welfare and the emergence of pension fund activism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00268847, HAL.
- BELAN, P. & MICHEL, Ph. & WIGNIOLLE, B., 2001.
"Pension funds and capital accumulation,"
CORE Discussion Papers
2001026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- repec:ebl:ecbull:v:4:y:2002:i:1:p:1-8 is not listed on IDEAS
- Becker, Robert A. & Foias, Ciprian, 2007. "Strategic Ramsey equilibrium dynamics," Journal of Mathematical Economics, Elsevier, vol. 43(3-4), pages 318-346, April.
- N. Gregory Mankiw, 1999.
"The Savers-Spenders Theory of Fiscal Policy,"
Harvard Institute of Economic Research Working Papers
1888, Harvard - Institute of Economic Research.
- John Laitner, 1982. "Monopoly and Long-Run Capital Accumulation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 143-157, Spring.
- Sorger, Gerhard, 2002. "On the Long-Run Distribution of Capital in the Ramsey Model," Journal of Economic Theory, Elsevier, vol. 105(1), pages 226-243, July.
- Gabszewicz, J. & Michel, P., 1992.
"Oligopoly Equilibria in Exchange Economies,"
Papiers d'Economie MathÃ©matique et Applications
92.26, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Gabszewicz, J.J. & Michel, P., . "Oligopoly equilibrium in exchange economies," CORE Discussion Papers RP 1265, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- GABSZEWICZ, Jean & MICHEL, Philippe, 1992. "Oligopoly equilibria in exchange economies," CORE Discussion Papers 1992047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- CODOGNATO, Giulio & GABSZEWICZ, Jean J., .
"Cournot-Walras equilibria in markets with a continuum of traders,"
CORE Discussion Papers RP
1041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Codognato, Giulio & Gabszewicz, Jean J, 1993. "Cournot-Walras Equilibria in Markets with a Continuum of Traders," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(3), pages 453-64, July.
- Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997.
"Beyond Balanced Growth,"
CEPR Discussion Papers
1693, C.E.P.R. Discussion Papers.
- Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997. "Beyond Balanced Growth," NBER Working Papers 6159, National Bureau of Economic Research, Inc.
- Sergio Rebelo & Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
- Kongsamut, P. & Rebelo, S. & Xie, D., 1997. "Beyong Balanced Growth," RCER Working Papers 438, University of Rochester - Center for Economic Research (RCER).
- JASKOLD GABSZEWICZ, Jean & VIAL, Jean-Philippe, .
"Oligopoly "à la Cournot" in a general equilibrium analysis,"
CORE Discussion Papers RP
106, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jaskold Gabszewicz, Jean & Vial, Jean-Philippe, 1972. "Oligopoly "A la cournot" in a general equilibrium analysis," Journal of Economic Theory, Elsevier, vol. 4(3), pages 381-400, June.
- Barro, Robert J, 1974.
"Are Government Bonds Net Wealth?,"
Journal of Political Economy,
University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
When requesting a correction, please mention this item's handle: RePEc:eee:reecon:v:59:y:2005:i:2:p:189-208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.