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A dynamic general equilibrium analysis of deviations from the laws of one price

Article Abstract:

Movements in variable and autocorrelated relative export and producer prices and in relative import and producer prices are studied and recorded using disaggregated West German prices. Deviations from the Laws of One Price are implied. Models of perfect competition, monopoly, monopolistic competition with constant mark-up pricing and Cournot oligopoly were found to be inconsistent with the variability of relative price movements. The model developed suggests variability in relative prices can be generated by differentiated oligopolistic market structures with strategic pricing.

Analysis, Usage, Prices and rates, International trade, Markov processes, Equilibrium (Economics)

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Growth and the dynamics of trade liberalization

Article Abstract:

A model that analyzes the dynamics of endogenous trade liberalization is presented. Trade liberalization is modeled as occurring in a repeated game between national governments in which it is driven by economic development activities. The model addresses issues such as the effects of national growth rate differences in the speed and pattern of trade liberalization, the tendency of fast-growing countries to be leaders or followers in process of trade liberalization and the effects of international spillovers of technological knowledge on the pattern of trade liberalization.

Administration of General Economic Programs, Trade Relations, Economic development, International economic relations, Trade policy, International trade regulation, Tariffs

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Aggregate fluctuations with increasing returns to specialization and scale

Article Abstract:

The impact of technological shocks is examined in the context of a business cycle model where competition is monopolistic. Analysis shows that the responses of aggregate variables associated with a technology shock are not affected by market power or by increasing returns related to fixed costs. However, the responses of aggregate variables are lowered by returns to scale in variable factors, whereas returns to specialization have the opposite effect. Returns to scale and specialization also influence the measurement of the variance of technology shocks.

Models, Competition (Economics), Technological innovations, Monopolies, Business cycles

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