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|Title:||Non-smooth dynamics and multiple equilibria in a Cournot-Ramsey model with endogenous markups |
Costa, Luís F.
|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.|
discontinuous induced bifurcations
|Document Type:||Working Paper|
|Appears in Collections:||Cardiff Economics Working Papers|
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