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A note on optimal sectoral policies in production networks

Jorge Miranda-Pinto ()

Economics Letters, 2018, vol. 172, issue C, 152-156

Abstract: I study optimal sectoral policies in models with input–output linkages and distortions. Labor subsidies cannot implement the first best allocation. Intermediate input subsidies, or the right combination(s) between subsidies to labor and intermediates, can optimally correct for network externalities.

Keywords: Pecuniary externality; Input–output linkages; Sectoral input subsidies (search for similar items in EconPapers)
JEL-codes: E32 E60 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ecolet:v:172:y:2018:i:c:p:152-156