Journal Article Product Selection, Fixed Costs, and Monopolistic Competition Get access Michael Spence Michael Spence Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 2, June 1976, Pages 217–235, https://doi.org/10.2307/2297319 Published: 01 June 1976

Types of signaling mechanisms, 593.—Contingent contracts, 593.—Exogenously costly signals, 595.—Conclusions, 597.

I. Introduction, 51. — II. The choice of behavioral hypothesis, 53. — III. Assumptions, 54. — IV. Analysis of equilibria, 55. — V. Comparison with the passive-response equilibria, 63. — VI. Specialized firms, 63. — VII. Equilibria with complementary factors, 66. — VIII. Concluding remarks, 72. — Appendix A: Summary of the passive-response model, 73. — Appendix B: The elimination of dominated, passive equilibria, 73.

1. Introduction, 355. — 2. Hiring as investment under uncertainty, 356. — 3. Applicant signaling, 358. — 4. Informational feedback and the definition of equilibrium, 359. — 5. Properties of informational equilibria: an example, 361. — 6. The informational impact of indices, 368. — Conclusions, 374.

Introduction, 103.—Sources of bias in program selection, 106.—Numbers of programs and audience sizes in equilibrium, 114.—Summary of results and policy, 122.

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.