January 1, 1997
Competition in sheltered sectors: the level of the markup
CPB’s macroeconomic models currently in use were not built for analyzing a policy of deregulation and regulation to promote competition and enhance efficiency and welfare.
The question arises whether these models can be used for this purpose at all and, if not, what modifications are necessary. This paper briefly describes the economic theory of regulation and deregulation and judges CPB’s sectoral model ATHENA and applied general-equilibrium model MIMIC with respect to their usefulness for analyzing competition policy. Simulations with both models complement the theoretical analysis. The substantial differences in outcomes testify to the need of additional research.
Authors
Ate Nieuwenhuis
Paula Terra-Pilaar