ABSTRACT
In Chapter 10 we incorporate the time dimension in the analysis of structural policies. We will show how the impact of structural policies can be depicted and compared over time.
So far, we have not considered the time dimension in the formulation of market models. The analysis was comparative-static, i.e. we have analysed the implications of a policy regarding its impact on equilibrium values without considering the time horizon in which these changes happen. But the analysis of structural policies requires, at least to some extent, to take into account the time dimension. A supply curve shift induced by a structural policy is likely to occur over several time periods and the analysis should therefore try to capture this time dimension. Furthermore, supply shifts on markets will also occur without structural policies and the impact of a structural policy would then be the difference between two development paths, with and without structural policy, for the political objectives considered.
