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Markups and Inequality / Corina Boar, Virgiliu Midrigan.
- Format:
- Book
- Author/Creator:
- Boar, Corina.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25952.
- NBER working paper series no. w25952
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- We study optimal product market interventions in an unequal economy in which firm ownership is concentrated and markups increase with firm market shares. We characterize optimal regulation in a static Mirrleesian setting in which we impose no constraints on the shape of interventions, and take into account their general equilibrium and distributional effects. We find that optimal regulation improves allocative efficiency, thereby increasing product market concentration. Though it leads to greater inequality, optimal regulation increases the equilibrium wage, benefiting most households. This result extends to a dynamic setting with capital and wealth accumulation.
- Notes:
- Print version record
- June 2019.
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