Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214968 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7966
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We provide an overview and synthesis of recent work on models of monopolistic competition with heterogeneous firms in international trade, paying particular attention to competition effects, pass-through, selection effects, and linking distributions of firm characteristics and outcomes. A recurring theme is that CES preferences are extremely convenient for deriving analytic results, but also extremely restrictive in their theoretical and empirical implications. We introduce the class of "constant-response demand functions" to describe some related families of demand functions that provide a unifying principle for much recent work that explores alternatives to CES demands.
Subjects: 
heterogeneous firms
pass-through
quantifying effects of globalization
super- and sub-convexity
supermodularity
JEL: 
F12
L11
F23
Document Type: 
Working Paper
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