Revisiting the Marriage of Monopolistic Competition and Factor Proportions Theories
Bibliographic record
Abstract
This paper reconsiders the factor proportions-driven model of trade under a monopolistic competition framework when cost functions are non-homothetic. The pattern of trade is fully analyzed for a two-country, two-sector, and two-factor monopolistic competition model with transport costs. The main results of this transformed cost assumption that differ from previous literature include: (a) the average firm size in relatively capital-abundant countries is smaller; (b) controlling for industry demand, capital-abundant countries support a larger number of varieties in equilibrium; and (c) capital-abundant countries use more capital-intensive techniques in every sector. This model also generates many features of modern trade that cannot be solely explained by traditional horizontal differentiation models using a single factor or even two factors, assuming a homothetic cost function: (1) capital-abundant countries export higher priced varieties; (2) varieties produced using higher capital-intensive techniques have higher prices; (3) capital accumulation leads to increased relative prices over time; and (4) the higher priced manufacturing goods sold by richer countries also capture larger market shares relative to lower priced exports.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".