Market size, income heterogeneity, and trade
研究了在垄断竞争、可变加成和收入异质性下，市场扩大如何增加产品多样性、降低价格和加成，并发现高收入群体获益更多，且开放经济中一国市场扩大还会影响另一国的企业进入与退出。
This paper studies the effects of market enlargement in the context of monopolistic competition , variable markups, and income heterogeneity. Market enlargement increases product diversity and entices firms to reduce prices and markups due to pro-competitive effects. It benefits all individuals but more high-income ones. The strength of the market enlargement effect is independent of income inequality for Pollak’s (1971) preferences. In an open economy, the market enlargement of one country reduces prices globally while it fosters firm entry in this country and exit in the other country. Welfare gains are also larger for higher-income groups. A calibration exercise suggests that effects on market outcome and welfare gains are sizable.