Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330851 
Year of Publication: 
2025
Citation: 
[Journal:] Wirtschaftsdienst [ISSN:] 1613-978X [Volume:] 105 [Issue:] 9 [Year:] 2025 [Pages:] 656-658
Publisher: 
Sciendo, Warsaw
Abstract (Translated): 
Subsidies are a key economic policy instrument. This article analyses the effects of three types of subsidies. Ad valorem subsidies, in which the subsidy is granted in proportion to the price of the subsidised good, are particularly widespread. Although these subsidies stimulate demand, they lead to price-driving effects with limited volume expansion in markets with imperfect competition. In such realistic market forms, inverse subsidies, whose amount increases as the market price falls, offer a more efficient expansion of quantities at moderate costs. However, they remain underrepresented due to political and economic inertia and communicative complexity.
JEL: 
D04
L11
L50
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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