Element contents
A Reconsideration of the Theory of Non-Linear Scale Effects
The Sources of Varying Returns to, and Economies of, Scale
Published online by Cambridge University Press: 20 March 2018
Summary
The main thrust of this Element is a critical assessment of the theory and evidence concerning the sources of scale effects. It is argued that the analysis of static scale effects is important because scale effects are embedding in our world, and new technologies associated with an evolving economy often allow their exploitation when they cannot be exploited in less technically advanced and smaller economies. So, although static equilibrium theory is not a good vehicle for studying economic growth, showing how scale effects operate when output varies with given technology helps us to understand the scale effects that occur when output rises as a result of economic growth, even though that is typically driven by technological change.
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- Online ISBN: 9781108555029Publisher: Cambridge University PressPrint publication: 22 March 2018
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