Upon successful completion of this course, students will be able to:
Understand the principles underlying the construction of general equilibrium models and assess the trade-offs between analytical simplicity and explanatory power.
Apply economic modelling techniques to analyse macroeconomic issues arising from interactions among agents.
Formalize different types of imperfections in goods and labour markets, particularly in contexts of monopolistic and monopsonistic competition.
Analyse the macroeconomic implications of these market imperfections through rigorous reasoning grounded in economic intuition.
Interpret and evaluate the effects of market structure on the location of economic activity, regional inequalities, human capital accumulation, and labour market outcomes.
This course aims to show how relatively small departures from the assumptions of perfect competition, notably the presence of economies of scale and market power, can explain a wide range of macroeconomic phenomena.
Particular emphasis is placed on firms’ market power in both goods and labour markets and on its implications for price setting, wage determination, and the spatial distribution of economic activity. By aggregating firms’ individual behaviours within a general equilibrium framework, the course develops models of imperfect competition that provide insights into issues such as regional disparities, agglomeration processes, inequality, and discrimination.
The course also highlights situations in which market imperfections may justify public intervention aimed at improving economic efficiency.
1. Introduction: motivations and foundations of general equilibrium modelling under imperfect competition.
2. The Dixit-Stiglitz Model: the benchmark framework of monopolistic competition.
3. Extensions of the Dixit-Stiglitz Model: developments and variants of the benchmark model.
4. Market Size and the Location of Economic Activity: analysis of location choices when regions differ in size.
5. Human Capital and Agglomeration: the location of economic activity when regions are identical in size but individuals choose whether to invest in education and skills.
6. Agent Mobility and Agglomeration: the effects of geographical mobility on the spatial distribution of economic activity.
7. Firm Heterogeneity under Monopolistic Competition: implications of differences in firms’ productivity and characteristics.
8. Monopsonistic Competition: firms’ market power in labour markets and its economic consequences.
The course is primarily delivered through lecture-based teaching. Video capsules are occasionally used to complement classroom sessions by providing additional explanations of selected concepts and applications.
The course content is presented in detail in the lecture slides made available to students on WebCampus. These materials constitute the primary reference resource for studying and reviewing the course content.
Oral exam, closed book.
The material covers all the slides available on Webcampus.
The objective of the exam is not to be able to reproduce the (many) calculations, ... but to be able to explain the logic of the reasoning.
● Which modeling is adequate to explain which phenomenon?
● Why is it adequate?
● What is the structure of the modeling?
| Training | Study programme | Block | Credits | Mandatory |
|---|---|---|---|---|
| Master in Economics : General, Teaching focus | Finalité approfondie | 1 | 5 | No |
| Master in Economics : General, Teaching focus | Finalité didactique | 1 | 5 | No |
| Master in Economics : General, Teaching focus | Finalité spécialisée | 1 | 5 | No |
| Master in Economics : General | Standard | 1 | 5 | No |
| Master in Economics : General, Teaching focus | Finalité didactique | 2 | 5 | No |
| Master in Economics : General, Teaching focus | Finalité spécialisée | 2 | 5 | No |