Modelling Market Power in Labour and Product Markets in a Dynamic Economy

Huw Dixon

Ekonomia, 2000, vol. 4, issue 2, 104-121

Abstract: In this paper a unified framework is developed for modeling imperfect competition in a monopolistic economy in a dynamic setting. Concentrating on the steady state analysis, a graphical approach is developed in consumption/leisure space. In both cases, there is a distortion towards leisure and away from consumption/work. The unionized economy is dynamically efficient, in the sense that the marginal product of capital equals discount rate. However, the monopolistic economy is not: the marginal product of capital exceeds the discount rate. This enables us to compare the outcomes in terms of productivity, utility and employment.

JEL-codes: E6 H3 J5 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ekn:ekonom:v:4:y:2000:i:2:p:104-121

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