As is well known, one of the major shortcomings of the New Keynesian model (NKM) with Calvo-type price setting is the lack of a microeconomic foundation of its most important building block - price stickiness. In this paper I investigate the ability of a monetary Customer Markets model to...

We show that relaxing the assumption of CES preferences in monopolistic competition has surprising implications when trade is restricted. Integrated and segmented markets behave very differently, the latter typically implying a form of reciprocal dumping. Globalization and lower trade costs have...

Let <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$\mathcal{X }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi mathvariant="script">X</mi> </math> </EquationSource> </InlineEquation> be a set of outcomes, and let <InlineEquation ID="IEq2"> <EquationSource Format="TEX">$$\mathcal{I }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi mathvariant="script">I</mi> </math> </EquationSource> </InlineEquation> be an infinite indexing set. This paper shows that any separable, permutation-invariant preference order <InlineEquation ID="IEq3"> <EquationSource Format="TEX">$$(\succcurlyeq )$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mo stretchy="false">(</mo> <mo>≽</mo> <mo stretchy="false">)</mo> </mrow> </math> </EquationSource> </InlineEquation> on <InlineEquation ID="IEq4"> <EquationSource Format="TEX">$$\mathcal{X }^\mathcal{I }$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <msup> <mrow> <mi mathvariant="script">X</mi> </mrow> <mi mathvariant="script">I</mi> </msup> </math> </EquationSource> </InlineEquation> admits an additive...</equationsource></equationsource></inlineequation></equationsource></equationsource></inlineequation></equationsource></equationsource></inlineequation></equationsource></equationsource></inlineequation>