Optimal fiscal policy in sunspot-driven oligopolistic economies

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.
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Article dans une revue
Journal of Public Economic Theory, 2017, 19 (3), pp.620--638. 〈10.1111/jpet.12219〉
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Contributeur : Elisabeth Lhuillier <>
Soumis le : mardi 19 septembre 2017 - 11:59:10
Dernière modification le : jeudi 18 janvier 2018 - 01:43:29

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Rodolphe Dos Santos Ferreira, Frédéric Dufourt. Optimal fiscal policy in sunspot-driven oligopolistic economies. Journal of Public Economic Theory, 2017, 19 (3), pp.620--638. 〈10.1111/jpet.12219〉. 〈hal-01590001〉

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