Monetary and Economic Studies Vol.11, No.1 / July 1993

Modelling Complementarity in Monopolistic Competition

Kiminori Matsuyama

In recent years, monopolistic competition models have frequently been applied in macroeconomics, international and interregional economics, and economic growth and development. In this paper, I present a highly selective review in this area, with special emphasis on complementarity and its role in generating multiplier processes, agglomeration, underdevelopment traps, regional disparities, and sustainable growth or, more generally, what Myrdal (1957) called the "principle of circular and cumulative causation."


Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

Copyright © 1993 Bank of Japan All Rights Reserved.

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