Input-output linkages and monopolistic competition : input distortion and optimal policies

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dc.contributor.authorKohler, Wilhelmde
dc.contributor.authorJung, Benjaminde
dc.date.accessioned2024-04-08T09:01:18Z
dc.date.available2024-04-08T09:01:18Z
dc.date.created2021-08-30
dc.date.issued2021
dc.description.abstractIn this paper, we provide a detailed analysis of a mechanism that distorts production towards too much use of primary factors like labor and too little use of intermediate inputs. The distortion results from two ingredients that are cornerstones of modern quantitative trade theory: monopolistic competition and input-output linkages. The distortion as such is unrelated to trade, but has important consequences for trade policy, including a positive first-order welfare effect from an import subsidy. For a crystal-clear view on the distortion, we first look at it in a single-sector, closed economy where the monopolistic competition equilibrium would be efficient without the presence of input-output linkages. We compare the social-planner-solution with the decentralized market equilibrium, and we identify first-best policies to correct the distortion. To analyze the trade policy implications we then extend our analysis to a setting with trade between two symmetric countries. We identify first-best cooperative policies, featuring nondiscriminatory subsidies of intermediate input use, aswell as non-cooperative trade policies where countries use tariffs to weigh terms of trade effects against benefits from correcting the input distortion.en
dc.identifier.swb1768032661
dc.identifier.urihttps://hohpublica.uni-hohenheim.de/handle/123456789/6647
dc.identifier.urnurn:nbn:de:bsz:100-opus-19375
dc.language.isoeng
dc.relation.ispartofseriesHohenheim discussion papers in business, economics and social sciences; 2021,06
dc.rights.licensepubl-mit-poden
dc.rights.licensepubl-mit-podde
dc.rights.urihttp://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subjectInput-output linkagesen
dc.subjectMonopolistic competitionen
dc.subjectInternational tradeen
dc.subjectAllocational inefficiencyen
dc.subjectOptimal policyen
dc.subject.ddc330
dc.subject.gndWelthandelde
dc.subject.gndMonopolistische Konkurrenzde
dc.titleInput-output linkages and monopolistic competition : input distortion and optimal policiesde
dc.type.dcmiTextde
dc.type.diniWorkingPaperde
local.accessuneingeschränkter Zugriffen
local.accessuneingeschränkter Zugriffde
local.bibliographicCitation.publisherPlaceUniversität Hohenheimde
local.export.bibtex@techreport{Kohler2021, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6647}, author = {Kohler, Wilhelm and Jung, Benjamin}, title = {Input-output linkages and monopolistic competition : input distortion and optimal policies}, year = {2021}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }
local.export.bibtexAuthorKohler, Wilhelm and Jung, Benjamin
local.export.bibtexKeyKohler2021
local.export.bibtexType@techreport
local.faculty.number3de
local.institute.number520de
local.opus.number1937
local.series.issueNumber2021,06
local.series.titleHohenheim discussion papers in business, economics and social sciences
local.universityUniversität Hohenheimde
local.university.facultyFaculty of Business, Economics and Social Sciencesen
local.university.facultyFakultät Wirtschafts- und Sozialwissenschaftende
local.university.instituteInstitute for Economicsen
local.university.instituteInstitut für Volkswirtschaftslehrede

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