Imperfect competition in an open economy

Privatization in a Small Open Economy with Imperfect Competition

We look at privatization in a general equilibrium model of a small, tariff-distorted, open economy. There is a differentiated good produced by both private and public sector enterprises. A reduction in government production in order to cut losses from such production raises the returns to capital and increases the tariff revenue, which are welfare improving. However, privatization also leads to...

Competition Policy in an Open Economy

We examine the setting of national competition policy in a two-country setting, emphasizing the relationship of trade to the goals of competition policy (such as the degree and nature of competition). The issues we address involve the general equilibrium distributional effects of competition policy, the relationship of national competition policy to terms-of-trade gains and losses, the implicat...

Seminar Paper 98-06 Competition Policy in an Open Economy

Environmental Taxation and Structural Change in an Open Economy A CGE Analysis with Imperfect Competition and Free Entry

The economic effects of environmental taxes depend on the market structure. Under imperfect competition with free entry and exit, environmental taxes have an impact on economies of scale by changing the number and size of firms. Whether economies of scale rise or fall in a particular industry depends on induced changes in the price elasticity of demand. Because export demand is more price elast...

Understanding Markups in the Open Economy under Bertrand Competition

This paper introduces a new model to capture the key stylized facts of firm price setting behavior in the open economy. At the firm level, producers adjust their domestic prices more frequently and fully in response to marginal cost shocks than for the same goods sold abroad. At the macro level, the terms of trade are less volatile than the real exchange rate and trade liberalization reduces ma...