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Market power, the multiplier and economic policy under oligopolistic competition

Ludovic Julien

Economics Bulletin, 2008, vol. 4, issue 29, 1-8

Abstract: In this note, we consider a multisector macroeconomic model under oligopolistic competition. We analyze the effect of an increase of the number of sectors on equilibrium price and on allocations, when the number of oligopolits of each type is constant. We also show that a tax policy has more impact on aggregate activity when the economy has many sectors. Additionally, the tax multiplier is higher than the expenditure multiplier.

Keywords: strategic; interactions (search for similar items in EconPapers)
JEL-codes: D4 E0 (search for similar items in EconPapers)
Date: 2008-10-24
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