Ilzkovitz, Fabienne, Dierx, Adriaan, (2016), “Competition policy and inclusive growth”, Voxeu, 19 June
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.
Relevant Posts
- Bordon, Anna Rose, Ebeke, Christian, Shirono, Kazuko, (2016), “When Do Structural Reforms Work? On the Role of the Business Cycle and Macroeconomic Policies“, IMF Working Paper, No. 16/62, 15 March
- Merler, Sylvia, (2016), “A financial side to a macroeconomic story: macro imbalances and financial integration in the euro area”, Bruegel publications, 18 January