Neutrality in the choice of number of firms or level of fixed costs in calibrating an Armington-Krugman-Melitz encompassing module for applied general equilibrium models
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This paper shows how an Armington-Krugman-Melitz encompassing module based on Dixon and Rimmer (2012) can be calibrated, and clarifies the choice of initial levels for two kinds of number of firms, or parameter values for two kinds of fixed costs, that enter a Melitz-type specification can be set freely to any preferred value, just as the cases we derive quantities from given value data assuming some of the initial prices to be unity. In consequence, only one kind of additional information, which is on the shape parameter related to productivity, just is required in order to incorporate Melitz-type monopolistic competition and heterogeneous firms into a standard applied general equilibrium model. To be a Krugman-type, nothing is needed. This enables model builders in applied economics to fully enjoy the featured properties of the theoretical models invented by Krugman (1980) and Melitz (2003) in practical policy simulations at low cost.
権利
Copyrights 日本貿易振興機構（ジェトロ）アジア経済研究所 / Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO) http://www.ide.go.jp
雑誌名
IDE Discussion Paper
雑誌名(英)
IDE Discussion Paper
巻
465
発行年
2014-03-01
出版者
Institute of Developing Economies (IDE-JETRO)
著者版フラグ
publisher
日本十進分類法
331
JEL分類
JEL:C63 - Computational Techniques
JEL:C68 - Computable General Equilibrium Models
JEL:D58 - Computable Models
JEL:F12 - Models of Trade with Imperfect Competition and Scale Economies
JEL:L11 - Production, Pricing, and Market Structure;
地域/国名
世界、その他
キーワード(LSH)
Economics
Applied general equilibrium
Monopolistic competition
Firm heterogeneity
Calibration
Neutrality
Neutrality in the choice of number of firms or level of fixed costs in calibrating an Armington-Krugman-Melitz encompassing module for applied general equilibrium models
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