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The Incidence of Distortions

Author

Listed:
  • David Atkin
  • Baptiste Bernadac
  • Dave Donaldson
  • Tishara Garg
  • Federico Huneeus

Abstract

Economic distortions—such as market power, taxes, credit constraints, etc.— are fundamental in understanding income differences across countries. Recent work has documented the pervasive extent of economic distortions and how they lead to sub-stantial aggregate productivity loss. Far less well understood is how these phenomena affect members of society differently. In this paper we combine unique datasets from Chile, linking workers and owners to firms, firms to each other, firms to consumers, and firms and consumers to the government, in order to quantify the incidence of distortions for the first time.

Suggested Citation

  • David Atkin & Baptiste Bernadac & Dave Donaldson & Tishara Garg & Federico Huneeus, 2025. "The Incidence of Distortions," Working Papers Central Bank of Chile 1026, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:1026
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    File URL: https://www.bcentral.cl/documents/33528/133326/Documento+de+Trabajo+1026.pdf/2db629a4-1f19-472e-b2c4-e85385bd0ffd?t=1752616622700
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    References listed on IDEAS

    as
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    5. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    6. Redding, Stephen J. & Weinstein, David E., 2024. "Accounting for trade patterns," Journal of International Economics, Elsevier, vol. 150(C).
    7. David Rezza Baqaee & Emmanuel Farhi, 2020. "Productivity and Misallocation in General Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 105-163.
    8. David Rezza Baqaee & Emmanuel Farhi, 2019. "The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten's Theorem," Econometrica, Econometric Society, vol. 87(4), pages 1155-1203, July.
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    Cited by:

    1. Federico Huneeus & Yasutaka Koike-Mori & Antonio Martner, 2025. "The Anatomy of Aggregate Productivity," Working Papers Central Bank of Chile 1050, Central Bank of Chile.

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