Comments on the Harrison-Rutherford-Tarr CGE Model with Imperfect Competition and Increasing Returns to Scale

Harrison, Rutherford and Tarr (1997) use a multiregional Computable General Equilibrium (CGE) model with a CES multistage demand system, imperfect competition, increasing returns to scale (IRS), and two endogenous price elasticities of demand perceived by a firm in each national market, in order to quantify the reforms of the Uruguay Round, when firms compete in a quantity setting oligopoly with constant conjectures. This paper argues that the derivation of the price markups is based on two incorrect assumptions, which might affect their empirical results, especially on output and welfare.

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Year of publication:	1999
Authors:	De Santis, Roberto A.
Publisher:	Kiel : Kiel Institute for the World Economy (IfW)
Subject:	Allgemeines Gleichgewicht \| Mark-up Pricing \| Theorie \| Price markup \| Computable General Equilibrium analysis

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Series:	Kiel Working Paper ; 907
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	859769011 [GVK] hdl:10419/17773 [Handle] RePEc:zbw:ifwkwp:907 [RePEc]
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; D58 - Computable and Other Applied General Equilibrium Models
Source:	EconStor