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Constant Returns (constant + return)
Selected AbstractsDUALITY WITH SECTOR-SPECIFIC EXTERNALITIES UNDER SOCIAL CONSTANT RETURNS,THE JAPANESE ECONOMIC REVIEW, Issue 4 2006KAZUO NISHIMURA We develop dual approaches to quantity and price relationships of production in a general multisectoral model with sector-specific externalities. The production of each good exhibits socially constant returns to scale but privately decreasing returns. We find that the Stolper-Samuelson theorem holds for factor intensity ranking from the social perspective and that the Rybczynski theorem holds for factor intensity ranking from the private perspective. The price-output dual fails to hold in general. Moreover, we re-establish the Heckscher-Ohlin theorem in the two-sector case, as well as the factor endowment,factor price and price-output comparative statics in the high-dimension case under proper conditions. [source] On the Effects of Wage Pressure on the Unemployment Rate and Capital ShareGERMAN ECONOMIC REVIEW, Issue 4 2006Takashi Ohno Wage pressure; increasing returns to scale; unemployment; capital share Abstract. The purpose of this paper is to understand the behaviour of the capital share and the unemployment rate in Europe over the past quarter of a century. We consider a model with monopolistic competition, increasing returns and an imperfect labour market, assuming that the elasticity between capital and labour is less than unity. Previous works have generally assumed constant returns to scale. Our results offer an important conclusion, namely that increased wage pressure will increase the unemployment rate and the capital share even though the latter initially decreases, which fits the stylized facts about the studied economies. [source] Non-linearity in the cost-effectiveness frontierHEALTH ECONOMICS, Issue 6 2006Joanne Lord Abstract Conventional cost-effectiveness decision rules rely on the assumptions that all health care programmes are divisible and exhibit constant returns to scale for a homogeneous population; hence, the path between adjacent programmes on a cost-effectiveness frontier must be linear. In this paper we build a framework to analyse non-linear ,expansion' paths. We model the impact of two key sources of non-linearity: economies of scale or scope in the production of health care; and prioritisation of patients who are most likely to benefit from more expensive and more effective treatments. We conclude that the expansion path might be linear, convex or concave, depending on the situation. The path might also exhibit vertical discontinuity due to fixed costs or horizontal discontinuity due to indivisibility. The efficiency of resource allocation might be improved by empirical estimation of expansion paths. We discuss the advantages and disadvantages of this approach compared with a standard stratified analysis. Copyright © 2006 John Wiley & Sons, Ltd. [source] Endogenous City Formation with Production Externalities: Existence of EquilibriumJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 6 2007COURTNEY LAFOUNTAIN I show that equilibria exist in closed city-system models with production externalities if firms' production possibilities vary continuously with the source of the externality, are constant returns to scale in own inputs, include inaction, and satisfy free disposal; if firms have to employ their own inputs to produce output; if there is a finite number of firm types; and if some standard conditions on preferences and endowments are satisfied. This is the first model to include production externalities in the fully general equilibrium framework required for endogenous city formation. Thus, this result provides formal support for the conjecture that production externalities lead to urban agglomeration. [source] RETURNS TO SCALE AND REGIONAL GROWTH: THE STATIC-DYNAMIC VERDOORN LAW PARADOX REVISITED,JOURNAL OF REGIONAL SCIENCE, Issue 2 2007John S. L. McCombie ABSTRACT It has long been an article of faith amongst regional economists that increasing returns to scale are necessary to explain the punctiform location of economic activity and population. However, there is no consensus in the empirical literature over whether returns to scale are constant or increasing. A notable example of this lack of agreement is provided by the static-dynamic Verdoorn law paradox. While the dynamic Verdoorn law (specified using growth rates) yields estimates of substantial increasing returns to scale, the static Verdoorn law (specified using log-levels) indicates only the presence of constant returns to scale. In this paper, we explain the static-dynamic Verdoorn law paradox by showing that estimates of returns to scale obtained using the static law are subject to a spatial aggregation bias, which biases the estimates towards constant returns to scale. We illustrate our arguments by means of simulation exercises. The results obtained hold general lessons for applied economic analysis using spatial data. [source] Sraffa's Legacy in Economics: Some Critical NotesMETROECONOMICA, Issue 3 2002Sergio Parrinello On the basis of a specific methodology attributed to Sraffa, I present a critical assessment of certain conflicting positions that characterize the book Critical Essays on Piero Sraffa's Legacy in Economics (ed. H. Kurz, 2000). A criticism is addressed to Samuelson's view according to which the assumption of constant returns is an essential ingredient of Sraffa's theory of prices. It is argued that the defence against Samuelson's attack from the Sraffian side could be strengthened following the above methodology and a certain neoclassical literature. Some questions are raised about the constructive scope of the theoretical work developed along the guidelines of Sraffa's book. [source] Joint Production with ,Restricted Free Disposal'METROECONOMICA, Issue 1 2001Christian Lager A single production system with constant returns can produce any level and composition of demand by appropriate intensities of the cost-minimizing processes. Hence, in the long run, products can never be in excess supply and there exists a system of prices of production which is semipositive and independent of demand. These (and other) properties do not, in general, carry over to joint production systems where one or several processes produce two or more different products. The proportions in which products emerge will generally be different from those in which they are required for use. The usual approach to that problem is to apply the rule of ,free goods'. This assumption may be applied to goods which, if they are left where they are and as they are, cause neither costs nor benefits. But it cannot be applied to outworn machines, scrap, wastes or pollutants and is therefore not generally applicable. The present paper aims at finding conditions for the existence of cost-minimizing systems for cases where this crucial assumption either is completely absent or is substituted by the assumption of ,restricted free disposal', i.e. by the assumption that excess production is permitted up to a certain tolerated limit. It will be proved that the conditions for the existence of cost-minimizing systems with free disposal carry over to systems with restricted free disposal. [source] Optimal environmental and industrial policies and imperfect agglomeration effectsREGIONAL SCIENCE POLICY AND PRACTICE, Issue 2 2009Daisuke Ikazaki Agglomeration; technology; environment Abstract This paper examines a simple general equilibrium model that considers problems related to agglomeration, technology, and the environment. First, it is shown that the manufactured goods sector converts from classical technology with constant returns to scale to modern technology with increasing returns to scale as the regional population increases. The optimal pollution level might be an inverted-U shape with respect to population if optimal environmental policy is adopted. Second, the optimal population level of conversion is not attained in the market economy. The labour that is devoted to the manufactured goods sector in the market economy is too small. So, we derive the optimal subsidy rates to the manufactured goods sector to make resource allocation optimum. Third, we consider migration using the two-region model. One region becomes a large city and the other region becomes a rural area if the total population is large. The industrial policy tends to extend the population difference between city and rural areas. On the other hand, if the total population is small, a symmetric point will be stable equilibrium. [source] DUALITY WITH SECTOR-SPECIFIC EXTERNALITIES UNDER SOCIAL CONSTANT RETURNS,THE JAPANESE ECONOMIC REVIEW, Issue 4 2006KAZUO NISHIMURA We develop dual approaches to quantity and price relationships of production in a general multisectoral model with sector-specific externalities. The production of each good exhibits socially constant returns to scale but privately decreasing returns. We find that the Stolper-Samuelson theorem holds for factor intensity ranking from the social perspective and that the Rybczynski theorem holds for factor intensity ranking from the private perspective. The price-output dual fails to hold in general. Moreover, we re-establish the Heckscher-Ohlin theorem in the two-sector case, as well as the factor endowment,factor price and price-output comparative statics in the high-dimension case under proper conditions. [source] PRODUCTIVITY AND BUSINESS CYCLES IN JAPAN: EVIDENCE FROM JAPANESE INDUSTRY DATA,THE JAPANESE ECONOMIC REVIEW, Issue 2 2006T. MIYAGAWA Constructing a database of 37 industries, we examine whether the measured productivity in Japan is pro-cyclical and investigate the sources of this pro-cyclicality by using the production function approach employed by Hall (1990) and Basu and Fernald (1995). The aggregate Solow residual displays pro-cyclicality. A large number of industries show constant returns to scale. No significant evidence for the presence of thick-market externalities is found. Our results also hold when we consider labour hoarding, part-time employment, and the adjustment cost of investment. The results indicate that policies to revitalize the Japanese economy should concentrate on promoting productivity growth. [source] Measuring Technical Change Under Variable Returns to Scale: A Dual ApproachBULLETIN OF ECONOMIC RESEARCH, Issue 1 2000Guang H. Wan In this paper, a dual measure of technical change is developed. The measure does not require parametric specification or estimation of the underlying technology, nor the assumptions of constant returns to scale and perfect competition. Imposing these assumptions, the proposed measure is shown to be equivalent to Solow's productivity residual. Biases attributable to these assumptions are analysed. [source] | |||||||||||||