Endogenous Markups and Fiscal Policy

Costa, Luís F.

doi:10.1111/j.1467-9957.2004.00419.x

Cited by 17 publications

(17 citation statements)

References 30 publications

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“…Galí and Zilibotti (1995) present an endogenousgrowth model with Cournot competition and free entry, where the marginal product of capital is constant as in the AK model of Rebelo (1991). Costa (2004) also uses this framework in a Ramsey model with endogenous labour, but restricts its analysis to study steady-state fiscal policy.…”

Section: Introductionmentioning

confidence: 99%

Non-Smooth Dynamics and Multiple Equilibria in a Cournot-Ramsey Model with Endogenous Markups

2008

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Aberconway Building, Column Drive; Cardiff, CF10 3EU; United Kingdom. Terms of use: Documents in September 2008 AbstractWe develop a simple Ramsey model with numerous Cournotian industries where entry generates an endogenous markup. The model produces two different regimes: a monopoly and an oligopoly one. We provide a rigorous study of non-smooth dynamics and we also analyse the global dynamics of the model, demonstrating the model exhibits robust heteroclinic orbits, either of the smooth or the non-smooth type. Similar economies may be in any of these regimes and they may change regime along its convergence path. Fixed * Corresponding author. Financial support by FCT is gratefully acknowledged. This article is part of project POCTI/ECO/46580/2002 which is co-funded by ERDF. We are grateful to

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Section: Introductionmentioning

confidence: 99%

Non-Smooth Dynamics and Multiple Equilibria in a Cournot-Ramsey Model with Endogenous Markups

2008

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“…Note that, in this case, the market power has a negative correlation with aggregate output, which is consistent with counter-cyclical mark-ups as documented in the empirical literature 34 . Despite the fact this hypothesis is considered in Dixon and Lawler (1996), the treatment of scal-policy effectiveness in an endogenous-mark-up framework is done in Costa (2004). However, there are other endogenous-mark-ups models, 32 For a more detailed analysis of the underlying process and its fundamentals see Costa and Dixon (2007).…”

Section: Endogenous Mark-upsmentioning

confidence: 99%

“…Molana and Zhang (2001) study the steady-state effects in an intertemporal model similar to Costa (2004), where they assume that µ = µ (n) with µ 0 (n) < 0. In a way similar to Galí (1995), these authors assume that there is imperfect competition in intermediate goods markets used to produce nal goods and where a larger mass of varieties increases the elasticity of substitution amongst them.…”

Section: Wwweconomics-ejournalorg 28mentioning

confidence: 99%

Fiscal Policy under Imperfect Competition with Flexible Prices: An Overview and Survey

Costa

Dixon

2011

Economics

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This paper surveys the link between imperfect competition and the effects of fiscal policy on output, employment and welfare. We examine static and dynamic models, with and without entry under a variety of assumptions using a common analytical framework. We find that in general there is a robust relationship between the fiscal multiplier and welfare, the tantalizing possibility of Pareto improving fiscal policy is much more elusive. In general, the mechanisms are supply side, and so welfare improving policy, whilst possible, is not a general result. Published as Survey and Overview JEL E62

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“…Note that, in this case, the market power has a negative correlation with aggregate output, which is consistent with counter-cyclical mark-ups as documented in the empirical literature 31 . Despite the fact this hypothesis is considered in Dixon and Lawler (1996), the treatment of …scal-policy e¤ectiveness in an endogenous-mark-up framework is done in Costa (2004). However, there are other endogenous-mark-ups models, though not speci…cally dedicated to …scal-policy e¤ectiveness, that are surveyed in Rotemberg and Woodford (1999).…”

mentioning

confidence: 99%

“…as long as > :n: . Molana and Zhang (2001) study the steady-state e¤ects in an intertemporal model similar to Costa (2004), where they assume that = (n) with 0 (n) < 0. In a way similar to Galí (1995), these authors assume that there is imperfect competition in intermediate goods markets used to produce …nal goods and where a larger mass of varieties increases the elasticity of substitution amongst them.…”

mentioning

confidence: 99%

Fiscal Policy Under Imperfect Competition: A Survey

Costa

Dixon

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper surveys the link between imperfect competition and the effects of fiscal policy on output, employment and welfare. We examine static and dynamic models, with and without entry under a variety of assumptions using a common analytical framework. We find that in general there is a robust relationship between the fiscal multiplier and welfare, the tantalizing possibility of Pareto improving fiscal policy is much more elusive. In general, the mechanisms are supply side, and so welfare improving policy, whilst possible, is not a general result. Terms of use: Documents in EconStor may

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Endogenous Markups and Fiscal Policy

Cited by 17 publications

References 30 publications

Non-Smooth Dynamics and Multiple Equilibria in a Cournot-Ramsey Model with Endogenous Markups

Non-Smooth Dynamics and Multiple Equilibria in a Cournot-Ramsey Model with Endogenous Markups

Fiscal Policy under Imperfect Competition with Flexible Prices: An Overview and Survey

Fiscal Policy Under Imperfect Competition: A Survey

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