Imperfect Competition in an Overlapping Generations Model : A Case for Fiscal Policy
Imperfect competition is a meaningful feature for macroeconomic analysis only to the extent that is leads to properties qualitatively different from those obtained under perfect competition. In particular, we have to wonder how imperfect competition per se may find an alternative fiscal policy. For that matter we consider a simple overlapping generations model with firms acting as Cournot oligopolists in the good market. Through fiscal policy, a government, keeping the stock of money constant, retributes wealth amoung generations and absorb some of the output to provide public services. We show in this model that fiscal policy, by affecting firms’market power, can move the economy across perfect foresight stationary equilibria along a Pareto improving path, or that it can implement a full employment stationary equilibrium which Pareto-dominates underemployment equilibria
|Date of creation:||01 Dec 1994|
|Date of revision:|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1994077. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.