Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261560 
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Economic Structures [ISSN:] 2193-2409 [Volume:] 9 [Issue:] 13 [Publisher:] Springer [Place:] Heidelberg [Year:] 2020 [Pages:] 1-12
Publisher: 
Springer, Heidelberg
Abstract: 
The paper develops a two-country monopolistic competition model of trade featuring country-specific consumer tastes. The accounting for heterogeneity in tastes is achieved by assuming different elasticities of substitution in the CES utility function for different country consumers. The proposed framework extends the canonical Krugman's approach by revealing new effects regarding markups response to consumer heterogeneity and trade liberalization. Specifically, the model predicts that, depending on the preference structure, trade liberalization may lead either to decrease or increase in the level of markups, charged by monopolistically competitive firms across destination countries.
Subjects: 
Heterogeneous consumers
Monopolistic competition
CES utility function
International trade
Markups
JEL: 
F12
D43
L13
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.