On the Stabilizing Virtues of Imperfect Competition

Thomas Seegmuller

Post-Print from HAL

Abstract: We analyze the stabilizing role of imperfect competition on fluctuations due to indeterminacy and endogenous cycles. In this paper, imperfect competition is a source of monopoly profits, because of producer market power. Considering anoverlapping generations model with capital accumulation and elastic labor supply, we show that under imperfect competition, the emergence of endogenous fluctuations requires a weaker substitution between production factorsthan under perfect competition. In this sense, imperfect competition stabilizes fluctuations. However, we find an opposite conclusion concerning the elasticity of labor supply. Indeed, endogenous fluctuations are compatible with a less elastic labor supply under imperfect competition.

Keywords: Indeterminacy; endogenous fluctuations; imperfect competition; monopoly profits; mark-up (search for similar items in EconPapers)
Date: 2005
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00194173
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in International Journal of Economic Theory, 2005, 1 (4), pp.313-323. ⟨10.1111/j.1742-7363.2005.00019.x⟩

Downloads: (external link)
https://shs.hal.science/halshs-00194173/document (application/pdf)

Related works:
Journal Article: On the stabilizing virtues of imperfect competition (2005)
Working Paper: On the Stabilizing Virtues of Imperfect Competition (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00194173

DOI: 10.1111/j.1742-7363.2005.00019.x

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().