This paper puts recent work on the benefits of variety into the context of a more complete quantitative analysis of the Dixit-Stiglitz-Krugman model of monopolistic competition. We show how the gains from globalization are reflected in the increase in variety and the exploitation of economies of...

The standard formal presentation of the Dixit-Stiglitz-Krugman (DSK) model of monopolistic competition with a constant-elasticity-of-substitution (CES) utility function supposes a sufficient number of firms so that the elasticity of demand facing each variety is approximated by a constant...

This paper puts recent work on the benefits of variety into the context of an exact quantitative analysis of the Dixit-Stiglitz-Krugman model of monopolistic competition. We show that the gains from international trade are almost completely determined by the increase in variety and not economies...