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Globalisation and Market Structure

  • J.Peter Neary

This paper reviews some puzzling economic aspects of globalisation and argues that they cannot be satisfactorily addressed in perfectly or monopolistically competitive models. Drawing on recent work, a model of oligopoly in general equilibrium is sketched. The model ensures theoretical consistency by assuming that firms are large in their own markets but small in the economy as a whole, and ensures tractability by assuming quadratic preferences defined over a continuum of goods. Applications considered include the effects of trade liberalisation on industrial structure, on cross-border merger waves, and on the distribution of income between skilled and unskilled workers.

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File URL: http://www.dnb.nl/binaries/sr100_tcm46-146877.pdf
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Paper provided by Netherlands Central Bank in its series DNB Staff Reports (discontinued) with number 100.

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Length: 50 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:dnb:staffs:100
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