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Production Externalities (production + externality)
Selected AbstractsEndogenous 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] Consumption Externalities, Production Externalities and IndeterminacyMETROECONOMICA, Issue 4 2000Mark Weder In this paper we show that consumption externalities reduce the degree of increasing returns needed to generate indeterminacy in a two-sector optimal growth model. In equilibrium, consumption externalities operate as if the utility function is (close to) linear. If these externalities are strong, the minimum necessary increasing returns approach zero. Therefore, this paper,in a stylized fashion,provides an example of how microbehavior, i.e. interactions at the household level, can generate aggregate instability. Consumption externalities also help to eliminate the counterfactual cyclical behavior of consumption in the two-sector model. [source] Production externalities and local dynamics in discrete-time multi-sector growth models with general production technologiesINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 4 2005Kazuo Nishimura D90; O41 The present paper examines the dynamic properties of discrete-time, multi-sector growth models in the presence of sector-specific externalities. It extends the literature by allowing for multiple capital good sectors with general social constant returns production technologies. We establish conditions for the steady-state equilibrium to be locally determinate or locally indeterminate, depending crucially on the ratios of the social to private marginal products and the number of capital good sectors. We show that when the ratios of the social to private marginal products are uniform across all sectors, the steady state is always locally determinate in a two-sector model, although local indeterminacy might still arise when the economy features more than two sectors. [source] On expectations-driven business cycles in economies with production externalitiesINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 1 2009Stefano Eusepi C62; E32 Expectations-driven business cycles are defined as positive co-movement between consumption, investment and hours that result from a change in expectations, holding constant technology, preferences and government intervention. This note explores the possibility of expectations-driven business cycles in business cycle models with external effects. It is found that in one-sector models conditions for expectations-driven business cycles and conditions for multiple equilibria are tightly connected. In two-sector models those conditions appear to be mutually exclusive. [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] | ||||||||||