Endogenous Market Structures and Macroeconomic Theory

This article applies the emerging theory of endogenous market structures to macroeconomic issues through a few simple models. First, we study a model of Schumpeterian growth where strategic interactions and endogenous entry determine the equilibrium behaviour of the firms investing in R&D. Second, we provide a new framework to study business cycles with imperfect competition in quantities à la Cournot and endogenous entry, and we show how a temporary shock promotes entry, reduces the mark ups and magnifies the impact on consumption. Third, we revisit the new trade theory adopting both strategic interactions and endogenous entry and revisiting some traditional results on the impact of opening to trade, the optimal tariff and the optimal export subsidy.