Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/65839
Authors: 
Brito, Paulo
Costa, Luís F.
Dixon, Huw
Year of Publication: 
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

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