Horizontal differentiation and economic growth under non-CES aggregate production function
We present a model of economic growth driven by horizontal innovation in which, unlike the existing literature, the final output sector employs a non-specified, non-CES, additive production function. Our motivation in conducting such analysis is based on the recognition that the use of a CES aggregate production function in the final output sector leads to the unrealistic conclusion that the gross markup of price over marginal costs set in the monopolistically-competitive intermediate sector is constant. We derive necessary and sufficient conditions for an equilibrium with perfect competition in the final output market to exist even in the presence of a non-CES technology. These conditions generalize the usual properties of the CES case. We also analyze the long-run relation between economic growth and variable markups.
We develop a two-factor, two-sector trade model of monopolistic competition with variable elasticity of sub- stitution. Firms' prots and sizes may increase or decrease with market integration depending on the degree of asymmetry between countries. The country in which capital is relatively abundant is a net exporter of the manu- factured good, although both rm sizes and prots are lower in this country than in the country where capital is relatively scarce. The pricing policy adopted by rms depends neither on capital endowment nor country asymme- try. It is determined by the nature of preferences: when demand elasticity increases (decreases) with consumption, rms practice dumping (reverse-dumping).
This paper presents an analysis of innovative growth of the economy in terms of increase in production of natural resources held within the framework of the model. The aim is to study the problem questions commodity-oriented economy based on building models of endogenous growth. The models are built in the framework of the theory of endogenous growth and are a multi-sector extension of the Solow model with a constant rate of savings. In the proposed model to the economy added resource sector by developing its different from other companies, changes and non-tradable goods sector.
This paper analyses an extended version of creative destruction model with strategic complimentarity between R&D investment of firms and education investment of households [Aghion, Howitt, 1992; 2005]. The new assumption is that the probability of innovation in the productive sector is determined endogenously because it depends on the level of human capital in the economy. This model provides a framework to explain the coexistence of two long-run equilibria: zero growth equilibrium and sustainable positive growth equilibrium transition as well as the transition from zero growth to high-growth equilibrium. The model provides explanation for a convergence club phenomenon: some developing countries experience the absence of growth during the years, while others are characterized by catching-up process to the income level of developed countries.
Smoking is a problem, bringing signifi cant social and economic costs to Russiansociety. However, ratifi cation of the World health organization Framework conventionon tobacco control makes it possible to improve Russian legislation accordingto the international standards. So, I describe some measures that should be taken bythe Russian authorities in the nearest future, and I examine their effi ciency. By studyingthe international evidence I analyze the impact of the smoke-free areas, advertisementand sponsorship bans, tax increases, etc. on the prevalence of smoking, cigaretteconsumption and some other indicators. I also investigate the obstacles confrontingthe Russian authorities when they introduce new policy measures and the public attitudetowards these measures. I conclude that there is a number of easy-to-implementanti-smoking activities that need no fi nancial resources but only a political will.
One of the most important indicators of company's success is the increase of its value. The article investigates traditional methods of company's value assessment and the evidence that the application of these methods is incorrect in the new stage of economy. So it is necessary to create a new method of valuation based on the new main sources of company's success that is its intellectual capital.