Discussion Papers no. 352
Aggregate industry behaviour in a monopolistic competition model with heterogeneous firms
The paper analyses how a tractable representation of productivity heterogeneity among firms modifies the standard Dixit-Stiglitz (DS) model of monopolistic competition. The properties of the asymmetric model are explored by comparative statics analysis. The equilibrium adjustments of industry aggregates, such as the number of firms, output and the productivity of variable inputs are compared with the corresponding adjustments in the symmetric model. The analysis thereby clarifies when and why the standard DS model may provide a misleading picture of the aggregate industry behaviour. A by-product of the paper is to demonstrate that a more realistic description of a basic aspect of technology heterogeneity can be taken into account at a relatively low cost in terms of reduced tractability.
Om publikasjonen
- Tittel
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Aggregate industry behaviour in a monopolistic competition model with heterogeneous firms
- Ansvarlig
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Erling Holmøy
- Serie og -nummer
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Discussion Papers no. 352
- Utgiver
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Statistics Norway
- Emne
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Discussion Papers
- Antall sider
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27
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
Kontakt
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