Market size, income heterogeneity, and trade

被引：0

作者：

Kichko, Sergei ^{[1
]}

Picard, Pierre M. ^{[2
,3
]}

机构：

[1] Univ Trento, Dept Econ & Management, Trento, Italy

[2] Univ Luxembourg, DEM, CREA, Esch Sur Alzette, Luxembourg

[3] Univ Luxembourg, 6 Rue Richard Coudenhove Kalergi, L-1359 Esch Sur Alzette, Luxembourg

来源：

ECONOMICS LETTERS | 2024年 / 235卷

关键词：

Monopolistic competition; Additive preferences; Income inequality; Pro-competitive effects; Welfare; Trade; MONOPOLISTIC COMPETITION; MARKUPS; PRICES;

D O I：

10.1016/j.econlet.2024.111526

中图分类号：

F [经济];

学科分类号：

02 ;

摘要：

This paper studies the effects of market enlargement in the context of monopolistic competition, variable markups, and income heterogeneity. Market enlargement increases product diversity and entices firms to reduce prices and markups due to pro -competitive effects. It benefits all individuals but more high -income ones. The strength of the market enlargement effect is independent of income inequality for Pollak's (1971) preferences. In an open economy, the market enlargement of one country reduces prices globally while it fosters firm entry in this country and exit in the other country. Welfare gains are also larger for higher -income groups. A calibration exercise suggests that effects on market outcome and welfare gains are sizable.

引用

页数：6

共 21 条

[1] International Shocks, Variable Markups, and Domestic Prices [J].