Dixit-Stiglitz General Equilibrium Model with Oligopolistic Markets: Enough Is Enough
2011/06/14
研討會日期 : 2011-06-14
時間 : 14:30
主講人 : Professor John P. Conley
地點 : Conference Room B110
演講者簡介 : John P. Conley got his Ph.D. in Economics from Rochester University in 1990. He is currently serving as Professor of Department of Economics at Vanderbilt University. His research field is in public economics, cooperative game theory, non-cooperative game theory, and general equilibrium.
演講摘要 : We show that that the Melitz continuum interpretation of the DixitStiglitz monopolistic competition model does correspond to large finite economies unless it is built on a foundation of heterogeneous agents. In turn, of these agents will choose consume a most a strictly bounded number of commodities (rather than a strictly positive quantity of each of the infinite number of goods produced, as in Melitz). We work out an algebraic example of market equilibrium that reflects this approach and then show in greater generality that (1) the benefits to product diversity converge to zero as the economy gets large and (2) the proportion of imports goes to zero as countries get large in the presence of iceberg costs. We conclude it is difficult to build a case for trade simply on the back of a desire for product diversity. Instead, trade should take place when fixed costs are high relative to the size of the economies, different countries have fundamentally different production costs or different counties possess technology or resources that allow them to produce goods unavailable in other countries.
