IDEAS home Printed from https://ideas.repec.org/a/bla/jpbect/v19y2017i3p620-638.html
   My bibliography  Save this article

Optimal fiscal policy in sunspot-driven oligopolistic economies

Author

Listed:
  • Rodolphe Dos Santos Ferreira
  • Frédéric Dufourt

Abstract

Economies with oligopolistic markets are prone to inefficient sunspot fluctuations triggered by autonomous changes in firms equilibrium conjectures. A well-designed taxation-subsidization scheme can eliminate these fluctuations by coordinating firms in each sector on a single equilibrium, left unaffected. The optimal taxation scheme must select the number of active firms that makes the best trade-off (in terms of consumer welfare) between the markup and the scale inefficiency distortions. Implementing such stabilization policy leads to significant welfare gains, attributable to an "efficient stabilization effect," typically ignored in usual computations of the welfare costs of fluctuations.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Rodolphe Dos Santos Ferreira & Frédéric Dufourt, 2017. "Optimal fiscal policy in sunspot-driven oligopolistic economies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(3), pages 620-638, June.
    • Handle: RePEc:bla:jpbect:v:19:y:2017:i:3:p:620-638
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/jpet.2017.19.issue-3
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jpbect:v:19:y:2017:i:3:p:620-638. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/apettea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.