On financial frictions and firm's market power.

There are two opposing welfare effects of market power in a model with monopolistic competition, loan defaults and moral hazard. The loss of output produced if firms set a higher mark‐up over marginal costs confronts with some gain due to higher expected profits and the reduction of defaults. Such t...

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Bibliographic Details

Published in:	Economic Inquiry Vol. 61; no. 4; pp. 982 - 1006
Main Authors:	Casares, Miguel, Deidda, Luca G., Galdon‐Sanchez, Jose E.
Format:	Article
Published:	Wiley-Blackwell Oct2023
Subjects:	Monopolistic competition Market power Default (Finance) Credit control Moral hazard
Online Access:	View this record in EBSCOhost