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

Roberto De Santis ()

No 907, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: 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.

Keywords: Price markup; Computable General Equilibrium analysis (search for similar items in EconPapers)
JEL-codes: D43 D58 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:907

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