Increasing Returns and Economic Efficiency

Cover......Page 1
Contents......Page 8
List of Illustrations......Page 11
Acknowledgement......Page 12
Preface......Page 13
1 Introduction......Page 16
2.1 Possible non-neutrality of money......Page 24
2.2 Pecuniary external effects may have real efficiency implications......Page 31
2.3 Market equilibrium no longer Pareto optimal......Page 33
3.1 Introduction......Page 37
3.2 The E-F Conflict......Page 40
3.3 A specific model......Page 49
3.4 Concluding remarks......Page 53
Appendix 3A......Page 54
4 Existence of Average-Cost Pricing Equilibria with Increasing Returns......Page 55
5.1 The general case......Page 61
5.2 A specific case illustrated......Page 67
6.1 Introduction: Marginal versus inframarginal analysis......Page 70
6.2 Basic inframarginal analysis of division of labour......Page 72
6.3 Pareto optimality of general equilibrium in the new framework – the higher role of entrepreneurship......Page 74
6.4 Some welfare economic issues of division of labour......Page 77
6.5 Some implications......Page 81
Appendix 6A: A simple model of the Yang–Ng framework of division of labour......Page 85
Appendix 6B: Division of labour, coordination, and entrepreneurship......Page 87
7 The Smith Dilemma and Its Resolution......Page 91
7.1 Towards a resolution of the Smith dilemma......Page 92
7.2 The efficiency of the market: A simulation using the Dixit–Stiglitz model......Page 95
7.3 Concluding remarks......Page 101
8.1 Why should governments encourage improvements in transaction efficiency?......Page 103
8.2 A perspective from the Yang–Ng framework......Page 106
8.3 Introducing the role of the government......Page 113
8.4 Concluding remarks......Page 115
9 Average-Cost Pricing, Increasing Returns, and Optimal Output: Comparing Home and Market Production......Page 116
9.1 A model with home and market production......Page 119
9.2 A model with home and differentiated market production......Page 127
9.3 Concluding remarks......Page 135
10.1 Introduction......Page 137
10.2 Specialization and consumption constraints......Page 139
10.3 Does the economy of specialization make work ethics welfare-improving? A terms-of-trade approach......Page 144
10.4 Does the economy of specialization make work ethics welfare-improving? Further investigations......Page 149
10.5 Concluding remarks......Page 162
Appendix 10A......Page 165
11.1 Introduction......Page 169
11.2 The new classical trade theory......Page 171
11.3 The enrichment of a sector benefits others: The case of trade for specialization......Page 179
12 Conceptual and Policy Implications: Concluding Discussion......Page 184
Notes......Page 192
References......Page 197
G......Page 210
P......Page 211
Z......Page 212
P......Page 214
Y......Page 215