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Multisector monopolistic competition model

Author

Listed:
  • Igor Pospelov

    (Research University Higher School of Economics)

  • Stanislav Radionov

    (National Research University Higher School of Economics. Research group on macro-structural modeling of Russian economy)

Abstract

We present a natural generalization of the Dixit-Stiglitz monopolistic competition model (DSM) | we assume that there is a continuum of industries, each of them described as in DSM, and each characterized with its own elasticity of substitution. Although rms in all industries share the same level of productivity and costs, exogenous technological progress leads to non-trivial reallocations of labor and production to industries with lower elasticities of substitution. Thus the model, despite is simplicity and absence of additional assumptions about industry structure, generates the structural changes described in the economic growth literature

Suggested Citation

  • Igor Pospelov & Stanislav Radionov, 2013. "Multisector monopolistic competition model," HSE Working papers WP BRP 34/EC/2013, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:34/ec/2013
    as

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    File URL: http://www.hse.ru/data/2013/09/18/1275652605/34EC2013.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Dixit-Stiglitz model; monopolistic competition; economic growth; labor reallocations.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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