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Endogenous Market Structures and Macroeconomic Theory

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  • F. Etro

Abstract

This article applies the emerging theory of endogenous market structures to macroeconomic issues through a few simple models. First, we study a model of Schumpeterian growth where strategic interactions and endogenous entry determine the equilibrium behaviour of the firms investing in R&D. Second, we provide a new framework to study business cycles with imperfect competition in quantities à la Cournot and endogenous entry, and we show how a temporary shock promotes entry, reduces the mark ups and magnifies the impact on consumption. Third, we revisit the new trade theory adopting both strategic interactions and endogenous entry and revisiting some traditional results on the impact of opening to trade, the optimal tariff and the optimal export subsidy.

Suggested Citation

  • F. Etro, 2007. "Endogenous Market Structures and Macroeconomic Theory," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(4), pages 517-540.
    • Handle: RePEc:ete:revbec:20070401
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    File URL: http://feb.kuleuven.be/rebel/jaargangen/2001-2010/2007/TEM%202007-4/TEM-2007-4_01_Etro.pdf
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    Citations

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    Cited by:

    1. Colin Davis & Ken-ichi Hashimoto, 2019. "Innovation Offshoring with Fully Endogenous Growth," ISER Discussion Paper 1055, Institute of Social and Economic Research, Osaka University.
    2. Colin Davis & Ken‐ichi Hashimoto, 2021. "Import competition and industry location in a small‐country model of productivity growth," Review of International Economics, Wiley Blackwell, vol. 29(4), pages 1046-1064, September.
    3. Colciago, Andrea & Etro, Federico, 2010. "Real business cycles with Cournot competition and endogenous entry," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1101-1117, December.
    4. Federico Etro, 2008. "Stackelberg Competition with Endogenous Entry," Economic Journal, Royal Economic Society, vol. 118(532), pages 1670-1697, October.
    5. Maurizio Iacopetta & Raoul Minetti & Pietro F Peretto, 2019. "Financial Markets, Industry Dynamics and Growth," The Economic Journal, Royal Economic Society, vol. 129(621), pages 2192-2215.
    6. Jérôme Creel & Maurizio Iacopetta, 2015. "Macroeconomic Policy and potential growth," Documents de Travail de l'OFCE 2015-15, Observatoire Francais des Conjonctures Economiques (OFCE).
    7. Etro, Federico & Rossi, Lorenza, 2015. "New-Keynesian Phillips curve with Bertrand competition and endogenous entry," Journal of Economic Dynamics and Control, Elsevier, vol. 51(C), pages 318-340.
    8. Federico Etro, 2014. "The Theory Of Endogenous Market Structures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 804-830, December.
    9. Davis, Colin & Hashimoto, Ken-ichi, 2022. "Productivity growth, industry location patterns and labor market frictions," Regional Science and Urban Economics, Elsevier, vol. 97(C).
    10. Maurizio Iacopetta & Raoul Minetti & Pierluigi Murro, 2020. "Growing Through Spinoffs: Corporate Governance, Entry, And Innovation," Sciences Po publications 13/2020, Sciences Po.
    11. repec:hal:spmain:info:hdl:2441/3d1rt55ran82d86guhaponket6 is not listed on IDEAS
    12. Federico Etro & Andrea Colciago, 2010. "Endogenous Market Structures and the Business Cycle," Economic Journal, Royal Economic Society, vol. 120(549), pages 1201-1233, December.
    13. Maurizio Iacopetta & Raoul Minetti & Pietro F Peretto, 2019. "Financial Markets, Industry Dynamics and Growth," Economic Journal, Royal Economic Society, vol. 129(621), pages 2192-2215.
    14. Maria José Gil-Moltó & Dimitrios Varvarigos, 2012. "Industry Dynamics and Indeterminacy in an OLG Economy with Endogenous Occupational Choice," Discussion Papers in Economics 12/09, Division of Economics, School of Business, University of Leicester, revised Sep 2012.
    15. Federico Etro, 2010. "Endogenous market structures and antitrust policy," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(1), pages 9-45, March.
    16. Colin Davis & Ken‐ichi Hashimoto, 2018. "Corporate Tax Policy And Industry Location With Fully Endogenous Productivity Growth," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1136-1148, April.
    17. repec:hal:spmain:info:hdl:2441/5gcvpatejr92bbog69gpen3cmn is not listed on IDEAS
    18. Federico Etro, 2010. "Endogenous Market Structures and Contract Theory," Working Papers 181, University of Milano-Bicocca, Department of Economics, revised Mar 2010.
    19. Colin Davis & Ken-ichi Hashimoto, 2016. "Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth," Discussion Papers 1636, Graduate School of Economics, Kobe University.
    20. Colin Davis & Ken-ichi Hashimoto, 2016. "Economic Integration, Monopoly Power and Productivity Growth without Scale Effects," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 152-163, February.
    21. repec:hal:spmain:info:hdl:2441/2c47q6gpge8vrbqjak551kmu6c is not listed on IDEAS
    22. repec:hal:spmain:info:hdl:2441/1ani1qs24g9in97gbhnanm575u is not listed on IDEAS

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