Policy Analysis with a Simple Model with Oligopoly, Increasing Returns and a Dual Role Agricultural Sector. An Application to the Argentine Experience.

Mercado, Ruben (1994): Policy Analysis with a Simple Model with Oligopoly, Increasing Returns and a Dual Role Agricultural Sector. An Application to the Argentine Experience.

Abstract

The main goal of this paper is simple: to emphasize the ambiguities of policy analysis when we departure from the standard competitive model as a point of reference. After reviewing the most salient features of the fiscal history of Argentina's industrial development, a simple static model is used to analyze the possible effects of a reversal in traditional fiscal policies, that is, a change from industry subsidies and industry protection to subsidies reduction and economic openness. By working with a model that incorporates some basic features of the Argentinean economy -oligopoly and increasing returns in a protected and subsidized industrial sector, and an agricultural sector producer of the main export-goods which are, at the same time, the principal components of the consumption bundle of the labor force- the ambiguities in net outcomes that have to be expected from the policy reorientation above mentioned are briefly analyzed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Policy Analysis. Oligopoly and Increasing Returns. Argentina.
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O23 - Fiscal and Monetary Policy in Development

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