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Subsidy

About: Subsidy is a research topic. Over the lifetime, 23894 publications have been published within this topic receiving 380899 citations. The topic is also known as: Subsidy.


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TL;DR: In a noncooperative equilibrium, the terms of trade move against the subsidizing country, but its welfare can increase because, under imperfect competition, price exceeds the marginal cost of exports as discussed by the authors.
Abstract: Countries often perceive themselves as being in competition with each other for profitable international markets. In such a world export subsidies can appear as attractive policy tools, from a national point of view, because they improve the relative position of a domestic firm in noncooperative rivalries with foreign firms, enabling it to expand its market share and earn greater profits. In effect, subsidies change the initial conditions of the game that firms play. The terms of trade move against the subsidizing country, but its welfare can increase because, under imperfect competition, price exceeds the marginal cost of exports. International noncooperative equilibriumis characterized by such subsidies on the part of exporting nations, even though they are jointly suboptimal.

1,742 citations

Journal ArticleDOI
TL;DR: In the noncooperative game, subsidies change the initial conditions of the game that firms play as mentioned in this paper, and the terms of trade move against the subsidizing country, but its welfare can increase if price exceeds the marginal cost of exports.

1,566 citations

Posted Content
TL;DR: A major challenge to social theory is to explain the pattern of government intervention in the market - what we may call "economic regulation" Properly defined, the term refers to taxes and subsidies of all sorts as well as to explicit legislative and administrative controls over rates, entry, and other facets of economic activity.
Abstract: A major challenge to social theory is to explain the pattern of government intervention in the market - what we may call "economic regulation" Properly defined, the term refers to taxes and subsidies of all sorts as well as to explicit legislative and administrative controls over rates, entry, and other facets of economic activity Two main theories of economic regulation have been proposed One is the "public interest" theory, bequeathed by a previous generation of economists to the present generation of lawyers This theory holds that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices It has a number of deficiencies that we shall discuss The second theory is the "capture" theory - a poor term but one that will do for now Espoused by an odd mixture of welfare state liberals, Marxists, and free-market economists, this theory holds that regulation is supplied in response to the demands of interest groups struggling among themselves to maximize the incomes of their members There are crucial differences among the capture theorists I will argue that the economists' version of the "capture" theory is the most promising but shall also point out the significant weaknesses in both the theory and the empirical research that is alleged to support it

1,554 citations

Posted Content
TL;DR: In this paper, the authors analyse an economy where managers engage both in the adoption of technologies from the world frontier and in innovation activities, and show that relatively backward economies may switch out of the investment-based strategy too soon, so certain economic institutions and policies, such as limits on product market competition or investment subsidies, which encourage the investmentbased strategy may be beneficial, however, fail to converge to the world technology frontier.
Abstract: We analyse an economy where managers engage both in the adoption of technologies from the world frontier and in innovation activities The selection of high-skill managers is more important for innovation activities As the economy approaches the technology frontier, selection becomes more important As a result, countries at early stages of development pursue an investment-based strategy, with long-term relationships, high average size and age of firms, large average investments, but little selection Closer to the world technology frontier, there is a switch to an innovation-based strategy with short-term relationships, younger firms, less investment and better selection of managers We show that relatively backward economies may switch out of the investment-based strategy too soon, so certain economic institutions and policies, such as limits on product market competition or investment subsidies, which encourage the investment-based strategy may be beneficial Societies that cannot switch out of the investment-based strategy, however, fail to converge to the world technology frontier Non-convergence traps are more likely when policies and institutions are endogenized, enabling beneficiaries of existing policies to bribe politicians to maintain these policies

1,384 citations

Journal ArticleDOI
TL;DR: In this article, the authors present an asset-market model of the housing market and estimate how changes in the expected inflation rate affect the real price of houses and the equilibrium size of the stock of owner-occupied housing.
Abstract: Inflation reduces the effective cost of homeownership and raises the tax subsidy to owner occupation. This paper presents an asset-market model of the housing market and estimates how changes in the expected inflation rate affect the real price of houses and the equilibrium size of the housing capital stock. Simulation results suggest that the accelerating inflation of the 1970s, which substantially reduced homeowners' user costs, could have accounted for as much as a 30 percent increase in real house prices. Persistent high inflation rates could lead ultimately to a sizable increase in the stock of owner-occupied housing.

1,262 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20231,903
20223,811
20211,012
20201,079
20191,012
20181,019