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Economic and Social Sustainability: The Influence of Oligopolies on Inequality and Growth

Kumar, Ronald R. and Stauvermann, P.J. (2020) Economic and Social Sustainability: The Influence of Oligopolies on Inequality and Growth. Sustainability, 12 (22). pp. 1-22. ISSN 2071-1050

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    Abstract

    To realize economic and social sustainability, it is necessary to avoid economic injustice and therefore too unequal a distribution of income and wealth. In this paper we investigate the extent to which oligopolies contribute to an unequal income distribution, and the consequences of enforcing more market competition. For this purpose, an overlapping generation growth model is developed with imperfect competition to derive the influence of market concentration on economic growth and the distribution of income. We investigate the influence of market concentration on the inter‐ and intra‐generational distribution of income and economic growth. We show that political lobbying and corruption are important reasons for missing competition in markets. While an increasing market concentration leads to a more unequal intra‐generational distribution and to a redistribution of income from the old to the young generation, the impact on economic growth is in general ambiguous, and specifically depends on the cost of lobbying.

    Item Type: Journal Article
    Subjects: H Social Sciences > HB Economic Theory
    H Social Sciences > HG Finance
    H Social Sciences > HJ Public Finance
    Divisions: Faculty of Business and Economics (FBE) > School of Accounting and Finance
    Depositing User: Ronald Kumar
    Date Deposited: 24 Nov 2020 15:28
    Last Modified: 24 Nov 2020 15:28
    URI: http://repository.usp.ac.fj/id/eprint/12462

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