Qualitative and quantitative analysis of equilibrium and optimal allocations in general equilibrium models of monopolistic competition with industry and firm heterogeneity

2017 Fiscal Year Final Research Report

• Project/Area Number: 26380326
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Economic policy
• Research Institution: Nihon University
• Principal Investigator: MURATA Yasusada 日本大学, 総合科学研究所, 教授 (40336508)
• Research Collaborator: BEHRENS Kristian ; MION Giordano ; SUEDEKUM Jens
• Project Period (FY): 2014-04-01 – 2018-03-31
• Keywords: 産業の異質性 / 企業の異質性 / 独占的競争 / 一般均衡 / 最適配分 / 市場の歪み / 過剰参入 / 厚生損失

Outline of Final Research Achievements

We build a general equilibrium model of monopolistic competition with industry and firm heterogeneity, and analyze qualitatively and quantitatively the gap between equilibrium and optimal allocations. We characterize inter- and intra-industry distortions by the elasticity of utility, the relative risk aversion, and the shape of productivity distribution. We further quantify the model using the UK and French employment and revenue data at the firm level and input-output data at the industry level, and find that inefficiencies in the labor allocation and firm entry between sectors, as well as inefficient firm selection and output within sectors, generate welfare losses of about 6-10% of GDP.

Free Research Field

国際経済学，都市経済学，独占的競争，局所化

Academic Significance and Societal Importance of the Research Achievements

本研究は，Dixit and Stiglitz (1977)以降，40年以上にわたり定性的に研究されてきた独占的競争の一般均衡モデルの市場均衡と最適配分の乖離を，多くの国で利用可能なデータを用いて定量化する手法を開発した点において学術的・社会的に意義があると思われる。