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Monopolistic Competition, Resource Allocation and the Effects of Industrial Policy




An indicator of allocation effects of industrial policy is derived from a theoretical framework of monopolistic competition. The indicator gives a qualitative picture of how industrial policy affects industry structure and resource allocation, it identifies the policy measures that work as industry assistance under various assumptions about underlying parameters, and it allows a consistent comparison of the assistance effects of different measures. Indicator calculations of industrial policy represent an efficient alternative to numerical general equilibrium analyses, especially in international comparisons. Illustrative indicator calculations of Norwegian industrial policy are presented.

Suggested Citation

  • Torbjørn Hægeland, 1996. "Monopolistic Competition, Resource Allocation and the Effects of Industrial Policy," Discussion Papers 161, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:161

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    References listed on IDEAS

    1. Hensher, David A., 1982. "Functional measurement, individual preference and discrete-choice modelling: Theory and application," Journal of Economic Psychology, Elsevier, vol. 2(4), pages 323-335, December.
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    5. Dagsvik, John K., 1988. "Markov chains generated by maximizing components of multidimensional extremal processes," Stochastic Processes and their Applications, Elsevier, vol. 28(1), pages 31-45, April.
    6. Dagsvik, J.K., 1995. "The Structure of Intertemporal Models for Myopic Discrete Choice with Random Preferences," Memorandum 11/1995, Oslo University, Department of Economics.
    7. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September.
    8. Mannering, Fred L. & Train, Kenneth, 1985. "Recent directions in automobile demand modeling," Transportation Research Part B: Methodological, Elsevier, vol. 19(4), pages 265-274, August.
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    More about this item


    Industry assistance; allocation effects; monopolistic competition; Norway.;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods


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