Template-Type: ReDIF-Paper 1.0
Author-Name:  Christian Bauer
Author-X-Name-First: Christian
Author-X-Name-Last: Bauer
Author-Email:  Christian.Bauer@wiwi.uni-regensburg.de
Author-Workplace-Name: Department of Economics, University of Regensburg
Title:  Competition in an Increasing Variety Growth Model
Abstract: This paper introduces competitive markets in the Grossman-
Helpman [1991, ch. 3] increasing variety growth model. In this
standard model of endogenous growth theory, competition has a
negative incentive effect. Accordingly, a larger resource base is
required to sustain long run growth. In an intermediate range,
however, there is path dependence. In this case, too much initial
competition may ultimately stall the growth process. Moreover, by
introducing asymmetry in market-power, competition gives rise to
static welfare losses. In economies with a small positive growth rate,
welfare losses due to varying mark-up factors may be large enough to
offset the benefits of growth.
Length:  43 pages
Creation-Date:  2006-09
File-URL: http://www.bgpe.de/texte/DP/001_bauer.pdf
File-Format: Application/pdf
File-Function: First version, 2007
Number: 001
Classification-JEL: O34, O41
Keywords: 
Handle: RePEc:bav:wpaper:001_bauer