Uneven recessions and optimal firm subsidies☆

• 成果类型: Article
• 署名作者: Machado, Caio
• 署名单位: Pontificia Universidad Catolica de Chile
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2024.105250
• 发表日期: 2024
• 关键词: Firm subsidies; Demand externalities; Uneven shocks

摘要

How should policymakers distribute firm subsidies when supply shocks hit some firms and spill over to others through demand externalities? I propose a model to answer that question. The optimal policy depends on the severity of the supply shock and the degree of substitution across goods. If shocks are not too large or widespread, it is optimal to subsidize only firms not hit by supply shocks. For larger and more widespread shocks, the results depend on the elasticity of substitution: If complementarities across the varieties produced by firms are high, firms facing supply shocks should be prioritized, and the opposite is true if complementarities are low.