Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148211
Authors: 
Ohki, Kazuyoshi
Year of Publication: 
2016
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 984
Abstract: 
We construct a monopolistic competition model considering different markups across industries and firm-level heterogeneity of productivity. An excess entry occurs in low-markup (competitive) industry, and vice versa in high-markup (non-competitive) industry. To achieve the optimum allocation, a social planner should implement an appropriate mix of policies, whose requirement is tighter than the homogeneous-firm model under some situations. The total amount of optimum subsidy (tax) is dependent on the property of distribution when the elasticity of substitution between industries is above unity.
Subjects: 
welfare
optimum policy
firm-level heterogeneity of productivity
non-synchronization of markups
Melitz-type model
JEL: 
D61
H21
L11
Document Type: 
Working Paper

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