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MARKET STRUCTURE AND THE DIFFERENTIAL EFFECTS OF RESTRICTIVE MONETARY POLICY *
Author(s) -
Koo Anthony Y. C.
Publication year - 1967
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1967.tb00884.x
Subject(s) - oligopoly , differential (mechanical device) , monetary policy , economics , market structure , monetary economics , profit (economics) , business , market economy , microeconomics , welfare , engineering , aerospace engineering
SUMMARY The paper explores the incidence of restrictive monetary policy on firms of different market structures. It is argued that in the period of tight money, firms with backlogs are less likely to suffer a loss of sales or profit than those without backlogs because of the ability of the former to shift future production to the current period. Since firms with backlogs can only be found in the oligopolistic sector, we conclude that the burden of the restrictive monetary policy is more likely to fall on the firms in the competitive sector than those in the oligopolistic one.