Rethinking Macroeconomics with Endogenous Market Structure

Abstract

Do entry, exit and changes in market structure aect the macroeconomy?
\nIs there a link between the strategic interactions among oligopolistic rms
\nand the macroeconomic equilibrium? The question is certainly not trivial
\nin modern economies, where large oligopolistic rms play a relevant role
\nand so many meetings among statesmen have the explicit scope of promoting
\ncontracts for some large and important rms of their countries. However,
\nsurprisingly enough, the most popular theoretical models in the modern
\nmacroeconomic literature hardly see any explicit formalization for the
\nmacroeconomic eects of changes in market structure, entry, exit and strategic
\ninteractions among oligopolists, if not as mere mechanic and secondary
\neects of the usual technology shocks, commonly invoked as the cause of
\nbusiness cycle. Do we really think that the sophisticated strategies of large
\nrms' decision makers do not carry any macroeconomic consequences? The
\nmarket structure and strategic interactions among oligopolists are not necessarily
\nassociated to scale economies or technology shocks. In order to better
\nfocus on this point, the theoretical model of this book describes, like some
\nof the most important original contributions in the conventional DSGE literature,
\nan economy where the labor is the only production input.
\nThis book deals with all these issues by introducing a new macroeconomic
\napproach: part ONE provides its theoretical background and modelling
\nframework, part TWO its implications by running some simulations
\nand comparing the results with the US macroeconomic data.