Increasing Returns and Economic Efficiency

by Y. Ng

Overview

Recognizing increasing returns disrupts much of the established wisdom in economic analysis, making money non-neutral, equity conflict with freedom, and encouraging goods with increasing returns efficient. This book discusses these problems and ways they can be handled, helping to explain phenomena in the real world.

Product Details

ISBN-13:	9780230202092
Publisher:	Palgrave Macmillan UK
Publication date:	04/30/2009
Edition description:	2009
Pages:	200
Product dimensions:	5.60(w) x 8.60(h) x 0.70(d)

About the Author

YEW-KWANG NG is Professor of Economics at Monash University and fellow of the Academy of Social Sciences in Australia, where he recently received the Distinguished Fellow Award, 2007, Economic Society of Australia. He has published papers in leading journals in economics as well as in biology, mathematics, philosophy, psychology, and sociology.

Table of Contents

Introduction Devastating Implications of Increasing Returns on Some Traditional Conclusions Equity and Efficiency vs. Freedom and Fairness: An Inherent Conflict Existence of Average-Cost Pricing Equilibria with Increasing Returns The Efficiency of Encouraging Goods with High Degrees of Increasing Returns Division of Labour: Increasing Returns at the Economy Level The Smith Dilemma and Its Resolution Why Should Governments Encourage Improvements on Infrastructure? Indirect Network Externality of Transaction Efficiency Average-cost Pricing, Increasing Returns, and Optimal Output: Comparing Home and Market Production Do the Economies of Specialization Justify the Work Ethics? An Examination of Buchanan's Hypothesis Specialization, Trade and Growth Conceptual and Policy Implications: Concluding Discussion

Editorial Reviews

'The role of increasing returns in the economy has been studied since the time of Adam Smith, yet it does not accord well with standard theories of competitive equilibrium. Yew-Kwang Ng has now presented in a comprehensive fashion the implications of taking increasing returns seriously and shown how they can be analyzed in a useful and highly original manner.' - Professor Kenneth Arrow, Nobel Laureate in Economics, Stanford University, US.

'Our failure to grapple adequately with the challenges of increasing returns is one of the great scandals of economics. But the problems are so hard that most people just look away. So hooray for Yew-Kwang Ng, who in this book shows that we can make progress in this area, and that incorporating increasing returns makes a fundamental difference to how we see the world.' - Professor Geoffrey Heal, Columbia Business School, US.

From the Publisher