Market Size, Trade, and Productivity

Melitz, Marc J., and Gianmarco I. P. Ottaviano. 2008.

Подготовила Растворцева СветланаБелгородский государственный университет

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• A monopolistically competitive model of trade• Firm heterogeneity in terms of productivity

differences• Endogenous differences in the toughness of

competition across markets – in terms of the number and average productivity of comp. firms

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Market Size, Trade, and Productivity

• Closed Economy• Open Economy• Trade Liberalization

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1. Closed Economy1.1. Preferences and DemandConsider an economy with L consumers, each supplying one unit of labor. All consumers share the same utility function given by

(1)

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1. Closed Economy1.1. Preferences and Demand Assume The inverse demand for each variety i is then given by

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(3)

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1. Closed Economy1.1. Preferences and Demand

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1. Closed Economy1.2. Production and Firm Behavior

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1. Closed Economy1.2. Production and Firm Behavior

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1. Closed Economy1.3. Free Entry Equilibrium

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1. Closed Economy1.4. Parametrization of Technology

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(13)(14)

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1. Closed Economy1.4. Parametrization of Technology

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1. Closed Economy1.4. Parametrization of Technology

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1. Closed Economy1.4. Parametrization of Technology

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1. Closed Economy1.5. A Short-Run Equilibrium

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1. Closed Economy1.5. A Short-Run Equilibrium

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2. Open Economy

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2. Open Economy

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2. Open Economy

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2. Open Economy

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2. Open Economy2.1. Free Entry Condition

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2. Open Economy2.1. Free Entry Condition

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2. Open Economy2.2. Prices, Product Variety, and Welfare

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2. Open Economy2.2. Prices, Product Variety, and Welfare

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2. Open Economy2.3. Number of Entrants, Producers, and Exporters

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2. Open Economy2.4. Reciprocal Dumping and Arbitrage Opportunities

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2. Open Economy2.5. The Impact of Trade2.6. Market Size Effects

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2. Open Economy2.7. The Open Economy in the Short-Run

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2. Open Economy2.7. The Open Economy in the Short-Run

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2. Open Economy2.7. The Open Economy in the Short-Run

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3. Trade Liberalization3.1. Bilateral Liberalization3.2. Unilateral Liberalization3.3. Preferential Liberalization

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3. Trade Liberalization3.3. Preferential Liberalization

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3. Trade Liberalization3.3. Preferential Liberalization

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3. Trade Liberalization3.3. Preferential Liberalization

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3. Trade Liberalization3.3. Preferential Liberalization

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Спасибо!

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