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On the Growth and Welfare Effects of Monopolistic Distortions

Arnold, Lutz G. ; Bauer, Christian


The most fundamental proposition about growth and competition is that there is a tradeoff between static welfare and long-term growth. This paper reconsiders this basic proposition in an expanding variety endogenous growth model with competitive markets for “old” innovative products and for a traditional good. We shed light on some implications of monopolistic distortions which tend to be ignored ...


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