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    Short-run policy commitment when investment timing is endogenour: "More harm than Good?"

    Dewit, Gerda and Leahy, Dermot (2004) Short-run policy commitment when investment timing is endogenour: "More harm than Good?". National University of Ireland Maynooth. (Unpublished)

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    We introduce endogenous leadership in a game between government and firms, in which the government has short-run commitment power only and firms choose when to invest. We show that firms that delay investment in the absence of government intervention have an incentive to invest early and strategically under policy activism. Then, even though a policy scheme succeeds in correcting an existing distortion targeted by the government. it can create a new and potentially more harmful one. We investigate when the government may do better by adhering to laissez-faire than by engaging in active policy intervention.

    Item Type: Other
    Keywords: short-run government commitment; Microeconomic policy; Endogenours policy leadership; Investment timing; Uncertainty; Laissez faire;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 145
    Depositing User: Ms Sandra Doherty
    Date Deposited: 30 Sep 2004
    Publisher: National University of Ireland Maynooth
    Refereed: No
      Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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