The Workshop of the HSE Center for Markets Theory and Spatial Economics

15 февраля 2012 (среда) - 18 февраля 2012 (суббота)
10-я линия В.О., д.3, к.205

Presentations:

Wednesday 15th:

10-30 – 11-30 Vladimir Matveenko:"Structure of equilibria in a sector of monopolistic competition in an endogenous growth model with horizontal innovations".

15-00 – 16-00 Sergey Kokovin:“Investments in productivity and quality under monopolistic competition”.

15-00 Jacques’s presentation in the Russian Academy of Sciences “Economic geography: Empirics and Theory” (Jacques considers this as a lecture for general public and does not invite there the Workshop participants).

17-00 – 18-00  Tatyana Mikhailova:“Gulag, WWII and the Long-Run Patterns of Soviet City Growth”.

19-00  Dinner.

Thursday 16th:

11-00 – 12-00  V.Vahitov: "Trade liberalization, agglomeration and inequality".

14-00 – 15-00  A.Shepotilo: "Effect of deregulation on productivity and wages with heterogeneous firms and workers. Impact of services deregualtion".

15-00 – 16-00   Philip Ushchev:"How does market size affect the product line scope? Monopolistic competition with multiproduct firms".

16-30 – 17-30  Sergey Kichko:“Two factors model of monopolistic competition and market integration”.

Friday 17th:

10-30 – 11-30  N.Volchkova: "Costs of exporting: evidence from Russia"

14-00 – 15-00  N.Tourdyeva: "Estimation of regional social accounting matrices with interregional trade data"

15-00 – 16-00  D.Pokrovsky: “Market size, productivity and entrepreneurship in a model a’la Melitz”.

Saturday 18th:
Discussions in small groups and cultural events.

* Jacques Thisse'presentation is in the Russian Academy of Sciences at 5, the University Emb.

- - - - -  Topics of Workshop presentations - - - - -

Dmitry Pokrovsky: “Market size, productivity and entrepreneurship in a
model a’la Melitz”
We develop a monopolistic-competition model of closed two-sector one-factor economy, where agents are (continuously) heterogeneous in their entrepreneurship abilities and choose between being employees or entrepreneurs. How the share of entrepreneurs in population changes when the market expands? The sufficient conditions in terms of variable elasticity of substitution are found for expanding or shrinking entrepreneurial sector. The changes in equilibrium consumptions, outputs, prices in the diversified sector are found for several important specifications of utility functions. In particular, special case of CES utility for varieties and Cobb-Douglas preference between the two sectors is the “neutral” borderline case between markets with increasing or decreasing productivity (and share of entrepreneurs) under market expansion.

Philip Ushchev: "How does market size affect the product line scope?
Monopolistic competition with multiproduct firms"
We propose a model of monopolistic competition with multi-product firms, choosing their product line. Firms bear costs of three kinds: variable production costs, fixed costs of creating a variety (like R&D) and costs of scope, i.e., of the product line length. When the market size (population) increases, the overall variety always increases. The firms’ product line and price increase (decrease) when the elasticity of substitution increases (decreases), whereas the firm size (output) reacts oppositely (when both cost functions are strictly convex). This suggests a theoretical rationale for cross-countries differences in the size and scope of firms, or for possible consequences of trade liberalization.

Sergey Kichko: “Two factors model of monopolistic competition and market integration”
A monopolistic competition model is developed, combining variable elasticity of substitution (VES) with two production factors: labor is used for variable cost, but capital is used for fixed cost to start a firm. Comparative statics of equilibria shows that number of firms is proportional to capital, whereas prices and sizes of firms respond to the growing market like in one-factor model. Increasing relative love for variety is the case when prices decrease.

Sergey Kokovin (paper with Bykodorov and Zhelobodko): “Investments in productivity and quality under monopolistic competition”
We study a monopolistic competition model with general (unspecified) utility and cost functions, seeking for impact of market size on productivity and product quality that are endogenous. I.e., a producer can invest in decreasing marginal cost or in increasing quality. It turns out that such investments increase with the market size if and only if utility shows increasing «relative love for variety» which is elasticity of the inverse demand. We expand these findings to heterogeneous firms and study comparative statics of equilibria.

Tatyana Mikhailova: “Gulag, WWII and the Long-Run Patterns of Soviet City Growth”
This paper analyzes geographical patterns of city growth in the Soviet Union and Russian Federation in connection with Stalinist policies of 1930s-1950s and the events of WWII. I construct and use the unique dataset on location of GULAG camps and evacuation of industrial enterprises during the WWII on the low level of geographical aggregation. I am able to match GULAG camps and evacuated enterprises to closest urban settlements. To my knowledge, this is the first paper that looks at GULAG and wartime events in the context of regional population growth in the USSR. The main finding is that presence of a GULAG labor camp nearby is a strong predictor of future population growth in Soviet cities. Cities where camps were located grow significantly faster than the average. WWII events (fighting on the front, evacuations) also affect local population growth, but their impact diminishes with time and disappears after 20-25 years. In contrast, GULAG camps have long-lasting (in some cases permanent) effect on city size.

Vladimir Matveenko: "Structure of equilibria in a sector of monopolistic competition in an endogenous growth model with horizontal innovations"
An endogenous growth model with a production function in a general form is studied. It is shown that a refuse from the basic assumptions concerning the production function in Romer’s (1990) model (constant returns to scale and the CES form) does not change basic results about the dynamics of the model; and an introduction of an assumption of Solow-type leads to a structure of equilibria depending on the characteristics of curvature of the production function. A comparative statics of the basic variables characterizing the economy is studied under a change of the ratio of the number of varieties of intermediate goods and corresponding expenditures of the firm of the sector of final production.

N.Volchkova: "Costs of exporting: evidence from Russia"

The paper presents the stylized facts of export firms’ heterogeneity in Russia and provides quantitative estimations for the ratio of fixed costs of production to fixed costs of exporting. Both stylized facts and direct costs estimations confirm the high fixed costs of exporting for Russian firms. The costs were found to be higher today in Russia than in Chile in 1990-1996 and comparable to the one estimated for Colombia over the period 1981-1986.

N. Mikheeva, N. Tourdyeva : "Estimation of regional social accounting matrices with interregional trade data"

Development of regional economic policies requires use of modern analytical tools capable of capturing the complexity of interregional links. One of the standard tool of regional economics is computable general equilibrium models (RCGE). Data for the RCGE model usually is presented in the Regional Social Accounting Matrix (RSAM) format. Construction of an RASM depends heavily on the availability of interregional trade data. We use non-survey methods as described in Sargento et al (2012), Canning and Wang (2005) for estimation of interregional trade for construction of RSAM of the Federal Districs of the RF.