Industrial subsidies and technology adoption in general equilibrium [An article from: Journal of Economic Dynamics and Control]

This digital document is a journal article from Journal of Economic Dynamics and Control, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
Industrial subsidies to failing establishments are common across developed economies. The paper constructs a dynamic general equilibrium model with a view to study the effects of this policy. Interestingly, subsidies to failing plants may increase productivity and accelerate the diffusion of new technologies. In spite of this, labor productivity, employment and income decrease, as resources are devoted to maintaining and updating establishments that would otherwise have closed.