Costa, Luís F.2024-02-162024-02-162006Costa, Luís F. (2006). "Entry and fiscal policy effectiveness in a small open economy within a monetary union". Portuguese Economic Journal, Vol. 5, No. 1: pp. 45-65. (Search PDF in 2024)http://hdl.handle.net/10400.5/30143In this article I develop an imperfectly competitive dynamic general equilibrium model for a small open economy integrated in a monetary union. Here, the type of entry in the non-traded goods’ sector affects fiscal policy effectiveness. Fiscal policy effectiveness is enlarged when aggregate demand stimuli increase intra-industrial competition (case I). This is due to the counter-cyclical mark-up mechanism generated by entry. Such a mechanism is absent in the usual monopolistic competition where entry only has a sharing effect (case II).engSmall EconomyEntryFiscal PolicyEndogenous Mark-Upsjournal articleDOI 10.1007/s10258-006-0003-81617-9838 (online)