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Market Structure in Multisector General Equilibrium Models of Open Economies

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  • Francois, Joseph
  • Manchin, Miriam
  • Martin, Will

Abstract

We provide an overview of several approaches to modeling market structure in multisector general equilibrium (MSGE) models, including both oligopoly and monopolistic competition. We emphasize open economy models and applications to international economic policy. We map out practical strategies for implementing variations on market structure, including functional forms and calibration strategies. We also identify areas that, in our view, are promising for further research. This includes both exploring the implications of moving away from average cost pricing models (including monopolistic competition) for labor market outcomes and inequality, and better methods for econometric estimation of parameters and confronting alternative forms of market structure against measures of model performance (specification testing).

Suggested Citation

  • Francois, Joseph & Manchin, Miriam & Martin, Will, 2013. "Market Structure in Multisector General Equilibrium Models of Open Economies," Handbook of Computable General Equilibrium Modeling, Elsevier.
  • Handle: RePEc:eee:hacchp:v:1:y:2013:i:c:p:1571-1600
    DOI: 10.1016/B978-0-444-59568-3.00024-9
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    Cited by:

    1. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.

    More about this item

    Keywords

    Market structure in MSGE models; oligopoly; monopolistic competition;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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