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Policy Analysis with a Simple Model with Oligopoly, Increasing Returns and a Dual Role Agricultural Sector. An Application to the Argentine Experience

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  • Mercado, Ruben

Abstract

The main goal of this paper is simple: to emphasize the ambiguities of policy analysis when we departure from the standard competitive model as a point of reference. After reviewing the most salient features of the fiscal history of Argentina's industrial development, a simple static model is used to analyze the possible effects of a reversal in traditional fiscal policies, that is, a change from industry subsidies and industry protection to subsidies reduction and economic openness. By working with a model that incorporates some basic features of the Argentinean economy -oligopoly and increasing returns in a protected and subsidized industrial sector, and an agricultural sector producer of the main export-goods which are, at the same time, the principal components of the consumption bundle of the labor force- the ambiguities in net outcomes that have to be expected from the policy reorientation above mentioned are briefly analyzed.

Suggested Citation

  • Mercado, Ruben, 1994. "Policy Analysis with a Simple Model with Oligopoly, Increasing Returns and a Dual Role Agricultural Sector. An Application to the Argentine Experience," MPRA Paper 111952, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111952
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    File URL: https://mpra.ub.uni-muenchen.de/111952/1/MPRA_paper_111952.pdf
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    References listed on IDEAS

    as
    1. Dani Rodrik, 1988. "Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 109-144, National Bureau of Economic Research, Inc.
    2. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2, January.
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    Keywords

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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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