Can market power sustain endogenous growth in overlapping-generations economies?
Sustained endogenous growth is known to be impossible in OLG one-sector models without non-convexities and externalities, unless income is redistributed to the young generation. No redistribution proper is however necessary, as shown in two simple examples, if positive profits accruing to young monopolistic entrepreneurs can be sustained in equilibrium, and/or if young unionised workers can guarantee a non-vanishing share of aggregate income. In this context, market power appears, in two different forms, as a significant source of sustained endogenous growth.
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Volume (Year): 20 (2002)
Issue (Month): 1 ()
|Note:||Received: October 3, 2000; revised version: March 9, 2001|
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