International Trade Models in Monopolistic Competition: the Case of Non-linear Costs

We study the international trade model ala Dixit-Stiglitz-Krugman with homogeneous firms. The utility of consumers are additive separable. Transport costs are “iceberg type and production cost function assumes non-linear. We study the local comparative statics with respect to transport costs of consumption, prices, firm's masses and sizes. We study carefully the situations near free trade and autarky. The results can be applied to the investigate the social welfare.