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Exploring the long-term impact of maximum markup deregulation

Published version
Peer-reviewed

Type

Article

Change log

Authors

Dimas, A 
Genakos, C 

Abstract

Do product market reforms have a lasting impact on the market? How does the adjustment path to the new equilibrium look once these reforms are implemented? Does it matter whether reforms are conducted under weak macroeconomic conditions? We examine pricing equilibrium, three and five years after the repeal of the maximum wholesale and retail markup regulation, in an oligopolistic and vertically non-integrated market in Greece, at the beginning of its economic crisis. Using a difference-in-difference framework, we show that market liberalization led to a significant decrease in both retail and wholesale prices and a shift to the left of the whole price distribution five years after the change, corresponding to approximately €212 million of added consumer welfare per year, or €1.06 billion in total over five years.

Description

Keywords

38 Economics, 3801 Applied Economics, 3802 Econometrics, 35 Commerce, Management, Tourism and Services

Journal Title

Anali Pravnog fakulteta u Beogradu

Conference Name

Journal ISSN

0003-2565
2406-2693

Volume Title

68

Publisher

Univerzitet u Beogradu - Pravni fakultet

Rights

Publisher's own licence