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IO for Export(s)

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  • Monika Mrázová
  • J. Peter Neary

Abstract

We provide an overview and synthesis of recent work on models of monopolistic competition with heterogeneous firms in international trade, paying particular attention to competition effects, pass-through, selection effects, and linking distributions of firm characteristics and outcomes. A recurring theme is that CES preferences are extremely convenient for deriving analytic results, but also extremely restrictive in their theoretical and empirical implications. We introduce the class of “constant-response demand functions” to describe some related families of demand functions that provide a unifying principle for much recent work that explores alternatives to CES demands.

Suggested Citation

  • Monika Mrázová & J. Peter Neary, 2019. "IO for Export(s)," CESifo Working Paper Series 7966, CESifo.
    • Handle: RePEc:ces:ceswps:_7966
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    References listed on IDEAS

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    More about this item

    Keywords

    heterogeneous firms; pass-through; quantifying effects of globalization; super- and sub-convexity; supermodularity;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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