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Sunday, June 19, 2016

Competition Policy and Inclusive Growth

At VoxEU:

Competition policy and inclusive growth, by Fabienne Ilzkovitz and Adriaan Dierx: Firms with greater market power can behave monopolistically, and recent research suggests that declining market competitiveness is driving income inequality. While competition authorities already measure the overall impact of their interventions by using customer savings, these measurements do not account for indirect effects of intervention. This column introduces a DSGE model to model competition policy interventions as a negative mark-up shock. Competition policy has a significant and positive impact on growth and jobs, and impacts richer and poorer households differently. Interventions have important redistributive effects that benefit the poorest in society.

    Posted by on Sunday, June 19, 2016 at 12:24 AM in Economics, Income Distribution, Market Failure | Permalink  Comments (13)


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