Entry and the accumulation of capital: a two state-variable\ud extension to the Ramsey model

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Brito, Paulo; Dixon, Huw; Cardiff University;
  • Publisher: Cardiff University
  • Subject: HB

In this paper we consider the entry and exit of firms in a dynamic general equilibrium model with capital. At the firm level, there is a fixed cost combined with increasing marginal cost, which gives a standard U-shaped cost curve with optimal firm size. Entry is determ... View more
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