The Heckscher–Ohlin model with monopolistic competition and general preferences

Economics Letters, 2017, vol. 158, issue C, 26-29

Abstract: I extend the neoclassical 2×2×2 trade model to general preferences over a variety of goods supplied under monopolistic competition in a sector while the other sector is perfectly competitive. Non-homothetic preferences deliver pricing to market, incomplete pass-through and market size effects. Under realistic conditions, the differentiated goods are sold at a higher price in the capital-abundant country.

Keywords: Monopolistic competition; Heckscher–Ohlin model; Non-homothetic preferences; International trade (search for similar items in EconPapers)
JEL-codes: F11 F12 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Working Paper: The Heckscher-Ohlin Model with Monopolistic Competition and General Preferences (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:158:y:2017:i:c:p:26-29

DOI: 10.1016/j.econlet.2017.06.021

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