Taste for variety: Model of Grossman and Helpman.
Taste for variety: Model of Grossman and Helpman.
Taste for variety: Model of Grossman and Helpman.
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Variety expansionThe <strong>Model</strong>Middle product dem<strong>and</strong> IIINow insert this last equation into the expression <strong>for</strong> the output:X =(( n∫ ) β/α )βp Yi BA i L 1−β1Y ix i (ω) α 1−αdω0( n∫ ) 1x i (ω) α 1−αdω0(8)This using Eq. 7 will give the dem<strong>and</strong> <strong>for</strong> each intermediateproduct as function <strong>of</strong> total output, X <strong>and</strong> prices:x i (k) = X ×n∫0p xi (k) − 11−αp xi (ω) 1− 11−α dω(9)