Economics, Econometrics and Finance
8 years ago

Trade model reveals multiple equilibria, reshaping global commerce dynamics.

Journal of International Economics
Multiple equilibria in the theory of international trade with monopolistically competitive commodities
Anthony J. Venables

Paper Summary

The article explores how small changes in trade model parameters can lead to different types of equilibria. It shows that certain parameter values can result in multiple equilibria, some supporting trade within industries. The study also examines the stability of each equilibrium, finding that if there are multiple equilibria, there are multiple stable equilibria.

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