Inter-Industrial Factor Allocation in the Short and Long Runs in Chamberlinian Monopolistic Competition

Hiroshi Goto

No DP2015-36, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This study reviews the allocation of factors among industries distinguishing between the short run and long run in a monopolistically competitive world. Without any conditions on scale economy, non-homotheticity, and factor intensity, it is shown that the long-run equilibrium characterized by factor-price equalization between industries is always locally stable. In addition, the direction of non-homothetic bias does not have qualitative effects on the allocation of factors, while it works as key elements to determine the direction of the change in relative industry size. The direction of the change in factor allocation mainly depends on the gross substitutability of factors which is magnified by non-homotheticity and scale economies.

Keywords: Non-homotheticity; Scale economy; Factor intensity; Elasticity of substitution (search for similar items in EconPapers)
JEL-codes: F11 L13 L16 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2015-36.pdf First version, 2015 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:dp2015-36

Access Statistics for this paper

More papers in Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University 2-1 Rokkodai, Nada, Kobe 657-8501 JAPAN. Contact information at EDIRC.
Bibliographic data for series maintained by Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University ().