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http://hdl.handle.net/10419/65839
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| Title: | | Non-smooth dynamics and multiple equilibria in a Cournot-Ramsey model with endogenous markups  |
| Authors: | | Brito, Paulo Costa, Luís F. Dixon, Huw |
| Issue Date: | | 2008 |
| Series/Report no.: | | Cardiff Economics Working Papers E2008/21 |
| Abstract: | | We develop a simple Ramsey model with numerous Cournotian industries where entry generates an endogenous markup. The model produces two different regimes: a monopoly and an oligopoly one. We provide a rigorous study of non-smooth dynamics and we also analyse the global dynamics of the model, demonstrating the model exhibits robust heteroclinic orbits, either of the smooth or the non-smooth type. Similar economies may be in any of these regimes and they may change regime along its convergence path. Fixed costs and elasticities of demand, play a crucial role and changing their values may alter the dynamics in a radical way, either by inducing a discontinuous transition or a discontinuous hysteresis. |
| Subjects: | | endogenous mark-ups non-smooth dynamics discontinuous induced bifurcations heteroclinic orbits |
| JEL: | | C62 D43 E32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Cardiff Economics Working Papers
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