We study a model of competitive foremarkets and partly monopolized aftermarkets. We show that high aftermarket power prompts firms to engage in inefficiently aggressive below-cost pricing in the foremarket. This inefficiency is driven by the presence of consumers with valuations below marginal...

[...]The branch prices we study are less limited. Increasingly,banks are entering new markets by buying one or morebranches from other banks (Benz 1998). The price of a givenbranch should depend on the branch’s expected profits, andexpected profits, in turn, depend on competition. All...

[...]In this article, we demonstrate how such industry-specific realexchange rates can be constructed and present the recent pathsof these indexes. We next present three basic real exchange ratemeasures for each industry: one using export partner weightsonly, a second using import partner...

This paper presents a two-country dynamic general equilibrium model with imperfectcompetition and nominal price rigidities in which productivity shocks coexist withmarkup shocks. After analyzing the features of the optimal cooperative solution, we showthat this allocation can be implemented in a...