Abstract This paper presents a two-country intra-industry trade model with bilateral ad valorem tariffs and fixed export costs that are heterogeneous across firms. In this model not all firms will choose to export. We examine the effects of reciprocal changes in the tariff and the fixed export...

This paper presents a two-country intra-industry trade model with bilateral ad valorem tariffs and fixed export costs that are heterogeneous across firms. In this model not all firms will choose to export. We examine the effects of reciprocal changes in the tariff and the fixed export barrier on...

Abstract This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in...

Price-setting models with monopolistic competition and costs of changing prices exhibit coordination failure: in response to a monetary policy shock, individual agents lack incentives to change prices even when it would be Pareto-improving if all agents did so. The potential welfare gains are in...

This paper examines ways of taxing monopolistically competitive firms that pollute the environment. There are two sources of welfare loss: production externalities and product selection bias associated with fixed costs. We argue that the optimal firm specific tax is always, strictly speaking,...

Abstract In the recent macro literature the effect of competition has been analyzed by comparing economies with the same market structure but different degrees of substitutability. In this note, we argue that this approach may mingle the price effect of competition with a pure allocation effect....

At what level should inflation be a concern? From a growth perspective, high and rising levels of inflation as in 2006–2008 raise concerns that inflation, if uncontained, could undermine growth. On the other hand, higher levels of inflation could create more space for using monetary policy to...

Are financial constraints preventing firms from importing capital goods? Sourcing capital goods from foreign countries is costly and requires internal or external financial resources. A simple model of foreign technology adoption shows that credit constraints act as a barrier to importing...

Purpose – Within the new public management (NPM) context, this paper aims to examine the inclusion of equity issues in pricing policy development and implementation in the water industry in Australia. Design/methodology/approach – A review of literature relevant to the pricing of water shows...

Purpose – Under the pressure of competition from non‐state‐owned enterprises (non‐SOEs) since the Renovation in 1986, the Government of Vietnam has sought to reform state‐owned enterprises (SOEs) in order to improve their productivity and efficiency. Whilst the theoretical efficiency...