Bødskov Andersen, Allan - Ehrvervøkonomisk Institut, Institut for Økonomi - 2000
We develop an extension to the Obstfeld and Rogoff (1995, 1996) two sector model with imperfect competition and norminal wage rigidities. Contrary to the Obstfeld and Rogoff (1995, 1996) analysis, we assume that technology exhibits decreasing returns to scale. We analyze the implications for the...