A stylized pattern of interindustry trade between developing and developed regions identifies the former as specialists in light manufactures and latter in heavy manufactures. Conventional explanations for this pattern rely on the factor proportions model, which is empirically suspect. This...

In general equilibrium models with oligopolistic firms, equilibrium outcomes may depend on the choice of numeraire. When firms have the power to influence prices strategically, different price normalisations entail objective profit functions which are generally not monotone transformations of...

We analyze the behavior of a monopolistic firm in general equilibrium when the firm's decision are taken through shareholder voting. We show that, depending on the underlying distribution, rational voting may imply overproduction as well as underproduction, relative to the efficient level. Any...

We analyze the role of imperfect competition in explaining the relationship between temporary surges in trade-volumes and the level of cooperation in trade policy that can be sustained between countries in a repeated game framework. Imperfectly competitive markets are characterized by a mark-up...

The paper studies equilibria for economies with imperfect competition and non-convex technologies. Following Negishi firms maximise profits under downward-sloping perceived demand functions. Negishi's assumptions, in particular the assumption of a single monopolistic competitor in each market,...

The aggregate demand and supply model (ADAS) is interpreted as a synthesis of the Keynesian and neoclassical models. It uses the ISLM model, without explaining its nature, to derive aggregate demand (AD). It is combined with an aggregate supply (AS) curve to explain price- inflation and output...

One of the most often discussed features of the Stability and Growth Pact is the rigidity of its 3% deficit rule. In the recent time several reform proposals aim at alleviating the rule in order to allow more room for the automatic stabilizers to operate. As the 3% limit became in the recent...

Using a dynamic aggregate supply and aggregate demand model with imperfect capital mobility and structural VARs, we decompose inflation and output movements into those attributable to terms of trade, supply, balance-of-payments, fiscal, and monetary shocks. Empirical results show that terms of...

This paper challenges the view that external shocks caused Euroland's 2001 slowdown and subsequent stagnation. Instead, the design of Euroland's macro policymaking arrangements is found lacking in looking after sufficient domestic demand growth. In the event the ECB has failed on its...