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Market Structure in Multisector General Equilibrium Models of Open Economies

In: Handbook of Computable General Equilibrium Modeling

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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, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1571-1600, 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. Yi, Chae-Deug, 2020. "The computable general equilibrium analysis of the reduction in tariffs and non-tariff measures within the Korea-Japan-European Union free trade agreement," Japan and the World Economy, Elsevier, vol. 56(C).
    2. James Markusen, 2023. "Incorporating Theory-Consistent Endogenous Markups into Applied General-Equilibrium Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 8(2), pages 60-99, December.
    3. Bekkers, Eddy & Francois, Joseph, 2013. "Trade and industrial structure with large firms and heterogeneity," European Economic Review, Elsevier, vol. 60(C), pages 69-90.
    4. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    5. Natalia Gennadyevna Zakharchenko & Olga Valeryevna Dyomina, 2015. "Modelling Energy - Economy Interactions: The Far East Experience," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 62-90.
    6. Chae-Deug Yi, 2022. "The impact of the Japan-European Union Economic Partnership Agreement on the trade and income of Japan, the European Union, and South Korea," Asia Europe Journal, Springer, vol. 20(3), pages 329-356, September.

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    More about this item

    Keywords

    Market structure in MSGE models; oligopoly; monopolistic competition;
    All these keywords.

    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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