Monopoly rights and Cross-country TFP
We ask for which part of the observed cross-country differences in the level of per-capita income monopoly rights can account. We answer this question in a calibrated growth model with capital. Monopoly rights in the capital-producing sector shield labor market insiders from the competition by outsiders and permit coalitions of these insiders to choose inefficient technologies or working practices. We find that monopoly rights can reduce the level of per-capita income by quantitatively substantial amounts that are much larger than previously claimed. Moreover, the effects of monopoly rights on the price of capital goods relative to consumption goods and the investment share in output are quantitatively consistent with the Penn World Tables. The key to our findings is that monopoly rights in the capital-producing sector do not only reduce total factor productivity there but also increase the relative price of capital. This reduces the capital-labor ratio in the rest of the economy.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:red:sed004:17. 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: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.