Trade, Growth and Increasing Returns to Infrastructure: The Role of the Sophisticated Monopolist

• Main Authors: GUHA, Ashok S., GUHA, Brishti
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2009
• Subjects: Growth and Development; International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1083; https://ink.library.smu.edu.sg/context/soe_research/article/2082/viewcontent/Trade_Growth_and_Increasing_Returns_to_Infrastructure_pp.pdf
• Institution: Singapore Management University

Equilibrium in international trade with increasing returns in infrastructure depends on whether the infrastructure provider is “naïve” or sophisticated. A monopolist produces infrastructure under decreasing cost using fixed equipment. Unlike similar work, we derive a unique closed-economy equilibriu...