Kiel Working Papers, Kiel Institute for World Economics
No 907:
Comments on the Harrison-Rutherford-Tarr CGE Model with Imperfect Competition and Increasing Returns to Scale
Roberto A. DeSantis
Abstract: Harrison, Rutherford and Tarr (1997) use a multiregional
Computable General Equilibrium (CGE) model with a CES multistage demand
system, imperfect competition, increasing returns to scale (IRS), and two
endogenous price elasticities of demand perceived by a firm in each
national market, in order to quantify the reforms of the Uruguay Round,
when firms compete in a quantity setting oligopoly with constant
conjectures. This paper argues that the derivation of the price markups is
based on two incorrect assumptions, which might affect their empirical
results, especially on output and welfare.
Keywords: Price markup and CGE analysis.; (follow links to similar papers)
JEL-Codes: D43; D58; (follow links to similar papers)
18 pages, February 1999
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