Autor(es):
Costa, Luís F. 
; Palma, Nuno
Data: 2006
Identificador Persistente: http://hdl.handle.net/10400.5/2648
Origem: Repositório da UTL
Assunto(s): Endogenous markup
Detalhes do Documento
Productive public expenditure and imperfect competition with endogenous price m...
Descrição
In a recent article Chen et al. (2005) analyse the role of government expenditure in an imperfectly competitive static model, introducing a government-expenditure externality through the production function. Our purpose in the present paper is to argue that the claim from the authors that their model generates an endogenous markup is in our view incorrect. We argue that their model does not contain an endogenous markup, but a fixed one and that their claim is based upon an incorrect interpretation of what is the marginal cost in their own model.
In a recent article Chen et al. (2005) analyse the role of government expenditure in an imperfectly competitive static model, introducing a government-expenditure externality through the production function. Our purpose in the present paper is to argue that the claim from the authors that their model generates an endogenous markup is in our view incorrect. We argue that their model does not contain an endogenous markup, but a fixed one and that their claim is based upon an incorrect interpretation of what is the marginal cost in their own model.
Tipo de Documento
Outro
Idioma Inglês
Idioma Inglês
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