New Keynesian models and some models of growth rely on market power for their results. This sole focus on market power as the source for certain macroeconomic phenomena is misguided both theoretically and empirically. New Keynesian multipliers are closely related to standard measures of...

This paper discusses the consequences of introducing imperfectly competitive product markets into an otherwise standard neoclassical growth model. We pay particular attention to the consequences of imperfect competition for the explanation of fluctuations in aggregate economic activity. Market...

We develop an extension to the Obstfeld and Rogoff (1995, 1996) two-sector model with imperfect competition and nominal wage rigidities. Contrary to the Obstfeld and Rogoff (1995, 1996) analysis, we make an explicit account for the investment side of the two-sector economy. We analyze the...

A model of procedural decision making in firms is combined with an oligopoly model to study the effect of limited managerial cognition on firm flexibility. It is argued that a firm may vary its flexibility, and, hence, that there exists a trade-off between decision-making costs and costs due to...

Paul Krugman's model of trade predicts that the country with the relatively large number of consumers is the net exporter and hosts a disproportionate share of firms in the increasing returns sector. He terms these results "home market effects". This paper analyses three additional models...