Endogenous markups and fiscal policy
This note analyses a simple imperfectly competitive general equilibrium model where the entry mechanism generates an endogenous markup. In this second-best world fiscal policy is more effective than in Walrasian or in fixed-markup monopolistic competition models, as it produces efficiency gains through entry.
(This abstract was borrowed from another version of this item.)
|Date of creation:||27 Sep 2004|
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