By considering firms operating in a perfectly- or monopolisticallycompetitive industry with free entry, we show that well-established results on the celebrated LeChatelier principle (LCP) do not extend into an endogenous competitive environment. For instance, labour demand may be more elastic in...

We build a three-country model of international trade in final goods and intermediate inputs and study the relation between different types of trade liberalisation and vertical integration. Firms are heterogeneous with respect to both productivity and factor intensity as observed in data....

We let heterogeneous firms face decisions on a number of complementary activities in a monopolistically-competitive industry. The endogenous level of competition and selection regarding entry and exit of firms introduces a wedge between monotone comparative statics (MCS) at the firm level and...

This paper builds a dynamic general equilibrium trade model, in which heterogeneous intermediate goods are produced and traded in a Melitz (2003) type sector. These intermediate goods are used in the production of a final good, which can be used for consumption, capital accumulation, or...