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Policy Analysis with a Simple Model with Oligopoly, Increasing Returns and a Dual Role Agricultural Sector. An Application to the Argentine Experience

Ruben Mercado ()

MPRA Paper from University Library of Munich, Germany

Abstract: The main goal of this paper is simple: to emphasize the ambiguities of policy analysis when we departure from the standard competitive model as a point of reference. After reviewing the most salient features of the fiscal history of Argentina's industrial development, a simple static model is used to analyze the possible effects of a reversal in traditional fiscal policies, that is, a change from industry subsidies and industry protection to subsidies reduction and economic openness. By working with a model that incorporates some basic features of the Argentinean economy -oligopoly and increasing returns in a protected and subsidized industrial sector, and an agricultural sector producer of the main export-goods which are, at the same time, the principal components of the consumption bundle of the labor force- the ambiguities in net outcomes that have to be expected from the policy reorientation above mentioned are briefly analyzed.

Keywords: Policy; Analysis.; Oligopoly; and; Increasing; Returns.; Argentina. (search for similar items in EconPapers)
JEL-codes: O11 O23 (search for similar items in EconPapers)
Date: 1994-01
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