Intersectoral Markup Divergence
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.
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.
Since the beginning of the market reforms in Russia, its integration into the world economy and the dependence on trends of the world economy development is steadily rising. New challenges from the world market and new opportunities for domestic producers, appeared after the liberalization of international trade, have become an important factor affecting the domestic economy. The research is devoted to estimation of general trends in trade development in Russia after it’s liberalization in 1991. The key questions we’d like to answer within the presented analysis are: 1) what were the economic conditions for development of trade in Russia after the launch of market reforms; 2) did the level of openness of the Russian Economy increased during the last 15 years; 3) whether international trade development caused long-term changes in production structure and relative prices in the Russian economy?
Standard measures of competitive toughness fail to capture the fact that, as consumers optimize intertemporally, firms operating today compete with (yet non-existent) businesses which will be started tomorrow. We develop a two-tier CES model of dynamic monopolistic competition in which the impact of product differentiation on the market outcome depends crucially on the elasticity of intertemporal substitution (EIS). The degree of product differentiation per se fails to serve as a meaningful indicator of competitive toughness: what matters is its cross-effect with EIS. We also extend the model to the case of non-CES preferences to capture variable markups.
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.
The article is devoted to the Asia-Pacifi c Economic Cooperation (APEC) Forum to be held and presided by the Russian Federation in early September 2012 in Vladivostok. The article gives the background for establishing the APEC, describes its goals and decisions adopted. It defi nes the APEC's place in the global economy as the largest association of States, which accounts for more than half of global GDP and which has set ambitious targets for establishing a free trade zone, liberalizing the investment climate and promoting regional integration. The article examines the major events in the global energy sector that triggered off the structural energy crisis in the early XXI century, causing the need for ensuring a global international energy security. The author suggests that the issue of energy security as a factor in implementing the strategic objectives of the APEC's economic and social development should be put on the agenda of the Forum. In this connection, the article analyzes the Draft Convention on Ensuring International Energy Security proposed by the Russian Federation for discussion and possible adoption. The article also puts forward several proposals for deepening regional integration to promote the development of the Far East and Siberia, and the creation of a new export base and promoting the Eastern vector of the Russian foreign economic cooperation policy.
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.