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International Trade in General Oligopolistic Equilibrium

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  • Peter Neary

Abstract

Abstract This paper presents a new model of oligopoly in general equilibrium and explores its implications for positive and normative aspects of international trade. Assuming“continuum-Pollak" preferences, the model allows for consistent aggregation over a continuum of sectors, in each of which a small number of home and foreign firms engage inCournot competition. I show how competitive advantage interacts with comparative advantage to determine resource allocation, and, specializing to continuum-quadraticpreferences, I explore the model's implications for the gains from trade, for the distribution of income between wages and profits, and for production and trade patterns ina two-country world.

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  • Peter Neary, 2015. "International Trade in General Oligopolistic Equilibrium," Economics Series Working Papers 769, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:769
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    More about this item

    Keywords

    “Continuum-Pollak preferences; Continuum-quadratic preferences; GOLE (General Oligopolistic Equilibrium); Market integration; Trade and income distribution;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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