Increasing Returns and Economic Efficiency

1. Front Matter

   Pages i-xiii

   PDF

2. Introduction

   • Yew-Kwang Ng

   Pages 1-8

3. Devastating Implications of Increasing Returns on Some Traditional Conclusions

   • Yew-Kwang Ng

   Pages 9-21

4. Equity and Efficiency versus Freedom and Fairness: An Inherent Conflict

   • Yew-Kwang Ng

   Pages 22-39

5. Existence of Average-Cost Pricing Equilibria with Increasing Returns

   • Yew-Kwang Ng

   Pages 40-45

6. The Efficiency of Encouraging Goods with High Degrees of Increasing Returns

   • Yew-Kwang Ng

   Pages 46-54

7. Division of Labour: Increasing Returns at the Economy Level

   • Yew-Kwang Ng

   Pages 55-75

8. The Smith Dilemma and Its Resolution

   • Yew-Kwang Ng

   Pages 76-87

9. Why Should Governments Encourage Improvements on Infrastructure? Indirect Network Externality of Transaction Efficiency

   • Yew-Kwang Ng

   Pages 88-100

10. Average-Cost Pricing, Increasing Returns, and Optimal Output: Comparing Home and Market Production

    • Yew-Kwang Ng

    Pages 101-121

11. Do the Economies of Specialization Justify the Work Ethics? An Examination of Buchanan’s Hypothesis

    • Yew-Kwang Ng

    Pages 122-153

12. Specialization, Trade, and Growth

    • Siang Ng

    Pages 154-168

13. Conceptual and Policy Implications: Concluding Discussion

    • Yew-Kwang Ng

    Pages 169-176

14. Back Matter

    Pages 177-200

    PDF

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.

• conflict
• economy
• efficiency
• ethics
• growth
• infrastructure
• labour
• money
• network
• pricing
• production
• trade

'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.

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.

Policies and ethics