Large and small firms in a global market: David vs. Goliath
The article deals with the theory of monopolistic competition under demand uncertainty. The authors consider the economy with labor immobility consisting of the high-tech sector with monopolistic competition and the standard sector with perfect competition. Preferences between sectors are specified by the Cobb – Douglas production function. It is assumed that companies make output decisions under preferences uncertainty and consumers’ distribution by sectors will be known by the time of realization. It means that firms are informed about consumer demand with accuracy up to a multiplicative uncertainty which is generated by random parameters in the Cobb – Douglas utility function. The paper shows that demand uncertainty leads to consistent growth of prices and wages in high-tech sector in relation to salaries in the second sector. The impact of uncertainty on welfare is ambiguous. In particular, under the known expected value of uncertainty customers derive benefit from exaggerated companies’ expectations about clients’ desire to consume high-tech goods.
The paper explores the evolution of trade and economic relations between Russia and Myanmar in 1948-2018. The author compares the quantitative and qualitative characteristics of Myanmar cooperation with China, India and Russia, highlighting their features and prospects. Summarizing the results, the author states that, despite the currently modest volumes of trade and investment, the potential for developing foreign economic relations between Russia and Myanmar is very high. However, Myanmar is an important link in the regional strategies of China and India, which also belong to the BRICS and the SCO. Therefore, it is impossible for Russia to build its political and economic ties with Myanmar without taking these aspects of regional relations into account.
We propose a general equilibrium model to study the spatial inequality of consumers and firms within a city. Our mechanics rely on Dixit and Stiglitz monopolistic competition framework. The firms and consumers are continuously distributed across a two-dimensional space, there are iceberg-type costs both for goods shipping and workers commuting (hence firms have variable marginal costs based on their location). Our main interest is in the equilibrium spatial distribution of wealth. We construct a model that is both tractable and general enough to stand the test of real city empirics. We provide some theoretical statements, but mostly the results of numerical simulations with the real Moscow data.
This collection includes scientific reports presented for participation in the International Conference: "The Evolution of the Global Trade System: problems and prospects" which took place on October 20-22, 2016 in St.Petersburg
This book contains a unique collection of studies on key economic and social policy challenges faced by countries of the Southern and Eastern Mediterranean region in a short- and long-term perspective. Prepared within the EU funded FP7 project on „Prospective Analysis for the Mediterranean Region (MEDPRO)” conducted in 2010-2013 it takes account on recent political developments in the region (Arab Spring) and their potential consequences. It covers a broad spectrum of topics such as factors of economic growth, macroeconomic and fiscal stability, trade and investment, Euro-Mediterranean and intra-regional economic integration, private sector development and privatizations, infrastructure, tourism, agriculture, financial sector development, poverty and inequality, education, labor market and gender issues.
We consider standard monopolistic competition models in the spirit of Dixit and Stiglitz or Melitz with aggregate consumer's preferences defined by two well- known classes of utility functions – the implicitly defined Kimball utility function and the variable elasticity of substitution utility function. These two classes gene- ralize classical constant elasticity of substitution utility function and overcome its lack of flexibility. It is shown in [Dhingra, Morrow, 2012] that for the monopolis- tic competition model with aggregate consumer’s preferences defined by the va- riable elasticity of substitution utility function the laissez-faire equilibrium is effi- cient (i.e. coincides with social welfare state) only for the special case of constant elasticity of substitution utility function. We prove that the constant elasticity of substitution utility function is also the only one which leads to efficient laissez- faire equilibrium in the monopolistic competition model with aggregate consu- mer’s preferences defined by the utility function from the Kimball class. Our main result is following: we find that in both cases a special tax on firms' output may be introduced such that market equilibrium becomes socially efficient. In both cases this tax is calculated up to an arbitrary constant, and some considerations about the «most reasonable» value of this constant are presented.
The protracted nature of the current global financial crisis has led to reduced forecasts of economic and energy consumption growth accompanied by an obvious accelerated increase in the share taken by developing countries. • In the long term, fossil fuels will remain dominant, against the background of a slower growth in the share of non-hydrocarbon energy resources than was estimated in the previous Outlook. The ‘shale breakthrough’ has postponed for two or three decades the threat of running out of economically viable oil and gas reserves – which had seemed so close just five to seven years ago – and has secured the predominantly hydrocarbon character of the world’s energy sector. The share of oil and gas in world primary energy consumption will remain practically unchanged (53.6 per cent in 2010 and 51.4 per cent by 2040). • The study of oil and gas price dynamics in different scenarios did not show fundamental cause for alarmist forecasts predicting either too high, or extremely low, prices within the period under review. In all cases – ranging from future success to possible failure of shale technologies – oil prices in 2040 will not move out of the range $100–130/bbl. Gas prices will be closely correlated with oil prices, but also strongly differentiated by region (which does not exclude large short-term fluctuations in prices under the influence of political and speculative factors). • Despite the integration of oil and gas markets, as international trade in oil and liquefied natural gas (LNG) expands, the trend towards regionalization of prices, resulting in considerable differences in price levels, will gain momentum. • Natural gas will account for the most substantial increase in absolute volumes of consumption, and the share taken by gas in primary energy consumption will increase more than that of any other fuel. The next 30 years could, quite reasonably, be considered as ‘the era of gas’. But Russia runs the risk of missing the resulting opportunities. • The consequences of the expected transformation of world energy and, especially, hydrocarbon markets will not significantly change the fuel markets themselves, but the positions of the leading market participants will clearly be rebalanced, while some global players will be able to gain influence. The results of our research clearly show that Russia will be more susceptible to adverse changes in market conditions during the forecast period. In the Baseline Scenario, Russian oil and gas exports to foreign markets appear to be significantly lower than the official national projections. • High costs and the current taxation system both limit the competitiveness of Russian energy resources in global markets. The Russian fuel and energy complex could face severe restrictions on external demand for energy resources at prices acceptable to Russia, resulting in additional risks for Russia’s energy sector and economy. This research provides preliminary estimates of the consequences of this impact on the country’s economic growth (one percentage point slowdown per year) and possible measures to compensate for it.
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.