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Can market power sustain endogenous growth in overlapping-generations economies?


  • Rodolphe Dos Santos Ferreira

    () (BETA-Theme, Université Louis Pasteur and Institut Universitaire de France 61, avenue de la Forêt Noire, F-67085 Strasbourg Cedex, FRANCE)

  • Teresa Lloyd-Braga

    () (Universidade Católica Portuguesa, FCEE, Palma de Cima, 1649-023, Lisboa, PORTUGAL)


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.

Suggested Citation

  • Rodolphe Dos Santos Ferreira & Teresa Lloyd-Braga, 2002. "Can market power sustain endogenous growth in overlapping-generations economies?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(1), pages 199-205.
  • Handle: RePEc:spr:joecth:v:20:y:2002:i:1:p:199-205 Note: Received: October 3, 2000; revised version: March 9, 2001

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    References listed on IDEAS

    1. Hao Li & Sherwin Rosen & Wing Suen, 2001. "Conflicts and Common Interests in Committees," American Economic Review, American Economic Association, vol. 91(5), pages 1478-1497, December.
    2. Nitzan, Shmuel & Paroush, Jacob, 1982. "Optimal Decision Rules in Uncertain Dichotomous Choice Situations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(2), pages 289-297, June.
    3. Farkas, Daniel & Nitzan, Shmuel, 1979. "The Borda Rule and Pareto Stability: A Comment," Econometrica, Econometric Society, vol. 47(5), pages 1305-1306, September.
    4. Eyal Baharad & Shmuel Nitzan, 2003. "The Borda rule, Condorcet consistency and Condorcet stability," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(3), pages 685-688, October.
    5. Eyal Baharad & Shmuel Nitzan, 2007. "Scoring rules: an alternative parameterization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(1), pages 187-190, January.
    6. repec:cup:apsrev:v:77:y:1983:i:01:p:123-141_24 is not listed on IDEAS
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    Cited by:

    1. Thomas Seegmuller, 2005. "On the stabilizing virtues of imperfect competition," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(4), pages 313-323.
    2. Seegmuller, Thomas, 2008. "Taste For Variety And Endogenous Fluctuations In A Monopolistic Competition Model," Macroeconomic Dynamics, Cambridge University Press, vol. 12(04), pages 561-577, September.
    3. Erkki Koskela & Mikko Puhakka, 2006. "Stability and Dynamics in an Overlapping Generations Economy under Flexible Wage Negotiation and Capital Accumulation," CESifo Working Paper Series 1840, CESifo Group Munich.
    4. Koskela, Erkki & Puhakka, Mikko, 2007. "Stability and Dynamics in an Overlapping Generations Economy with Flexible Wage Negotiations," IZA Discussion Papers 3246, Institute for the Study of Labor (IZA).
    5. Coimbra, Rui & Lloyd-Braga, Teresa & Modesto, Leonor, 2002. "Endogenous Growth Fluctuations in Unionised Economy with Productive Externalities," CEPR Discussion Papers 3230, C.E.P.R. Discussion Papers.
    6. repec:hal:journl:halshs-00194173 is not listed on IDEAS

    More about this item


    Endogenous growth; Overlapping generations; Imperfect competition in macroeconomics.;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


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