Trade based on economies of scale under monopolistic competition: a clarification of Krugman's model

Although a major contribution to trade theory, Krugman’s 1979 demonstration that ‘trade can arise and lead to mutual gains even when countries are similar’ fails to make explicit the economic mechanisms that lead up to this result. The current paper attempts to fill this gap by addressing several questions that are implicit in Krugman’s demonstration but which he does not explicitly analyze: - What is the effect of trade upon the demand curve faced by the typical firm in each nation? - How do firms react to the change in the demand curves they face, and what is the short-term outcome of their behaviour? - Why do some firms fail? - What is the role of the failure of firms in the adjustment to the final free trade equilibrium?Krugman, intra-industry trade, economies of scale, monopolistic competition.

(1,1)-forms acting on Spinors on K\"ahler Surfaces

It is known that, for Dirac operators on Riemann surfaces twisted by line bundles with Hermitian-Einstein connections, it is possible to obtain estimates for the first eigenvalue in terms of the topology of the twisting bundle \cite{JL2}. Attempts to generalize topological estimates for higher rank bundles or higher dimensional manifolds have been so far unsuccessful. In this work we construct a class of examples which indicates one problem that arises on such attempts to derive topological estimates

How to make discretionary fiscal policy countercyclical

In most countries, discretionary fiscal policy has often been pro-cyclical: instead of dampening the business cycle, actual discretionary policy has mostly magnified it. This paper proposes a mechanism that allows discretionary fiscal policy to be counter-cyclical. This involves the creation of a Budget Agency which carries out expenditures that, in addition to increasing its debt, also raise its saleable assets - and, therefore, do not reduce the net value of its balance-sheet. One example is the construction, during a downswing, of housing and office buildings that will be sold in the subsequent upswing. Besides real estate investment, the Budget Agency may also undertake “balance-sheet neutral” expenditures in two other sectors responsible for the bulk of business cycle fluctuations: business investment and durable consumption.stabilization, discretionary fiscal policy, business cycle.