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Pré-Publication, Document De Travail Année : 2013

On stabilization policy in sunspot-driven oligopolistic economies

Résumé

Economies with oligopolistic markets are prone to inefficient sunspot fluctuations triggered by autonomous changes in firms equilibrium conjectures. We show that a well designed taxation-subsidization scheme can eliminate these fluctuations by coordinating firms in each sector on a single efficient equilibrium. At the macroeconomic level, implementing this stabilization policy leads to significant welfare gains, attributable to a quantitatively dominant "efficient stabilization effect". This effect, while important, is typically ignored in the traditional computations of the welfare costs of aggregate fluctuations (e.g., Lucas, 2003).
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Dates et versions

hal-00789233 , version 1 (17-02-2013)

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  • HAL Id : hal-00789233 , version 1

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Rodolphe dos Santos Ferreira, Frédéric Dufourt. On stabilization policy in sunspot-driven oligopolistic economies. 2013. ⟨hal-00789233⟩
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