Timeliness, Trade and Agglomeration

An important element of the cost of distance is time taken in delivering final and intermediategoods. We argue that time costs are qualitatively different from direct monetary costs such asfreight charges. The difference arises because of uncertainty. Unsynchronised deliveries candisrupt production, and delivery time can force producers to order components beforedemand and cost uncertainties are resolved. Using several related models we show that thiscan cause clustering of component production. If final assembly takes place in two locationsand component production has increasing returns to scale, then component production willtend to cluster around just one of the assembly plants.Just- in-time, clustering, location, trade.

Timeliness, Trade and Agglomeration

An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertainties are resolved. Using several related models we show that this generates hitherto unexplored incentives for clustering. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants.

Geographical economics : A historical perspective

This paper provides a bird-eye overview of the history of spatial economic theory. It is organized around three main ideas (and authors): (i) land use and urban economics (Thünen), (ii) the nature of competition across space (Hotelling), and (iii) new economic geography and the emergence of economic agglomerations (Krugman).

Old and New Formulations of the Neoclassical Theory of Aggregate Investment: A Critical Review

This paper surveys the neoclassical theory of aggregate investment and its criticisms. We distinguish four main formulations of this theory: the traditional ‘Wicksellian’ investment function; the Fisherian ‘array-of-opportunities’ approach (as Witte Jr. called it); the Jorgensonian model; the now prevailing adjustment-costs models. With respect to other papers criticizing the neoclassical theory of investment, we do not appeal to market imperfections. We instead argue that all four formulations present serious theoretical difficulties, even conceding free competition

On the Recent Debate on Capital Theory and General Equilibrium

The paper disputes the negative conclusion of prof. Mandler on the thesis by Garegnani, Schefold, Parrinello that intertemporal general equilibrium theory too is undermined by reswitching and reverse capital deepening. The paper argues that Mandler’s conclusion rests upon highly criticisable assumptions that render the equations of intertemporal general equilibrium identical to those of general equilibria without capital goods. The Walrasian treatment of the capital endowment is criticized in Part I on the basis of its insufficient persistence, and of other ‘methodological’ criticisms that are systematically surveyed. In Part II it is shown through a numerical example that Mandler’s claim, that the assumption of a single consumer guarantees uniqueness of intertemporal equilibrium independently of reswitching or reverse capital deepening, rests on the absence of production of capital goods in the last period of the equilibrium; this assumption is thus revealed to be one of the tricks that prevents the existence of capital goods from changing the properties of the equilibrium relative to those of equilibria without capital

Growth with competing technologies and bounded rationality

I develop a model of growth based on three assumptions: first, a variety of technologies characterised by different degrees of labour skill intensity, where technological change is localized; second, agents are boundedly rational, and the aggregate rule of motion of their behaviour follows a replicator dynamics; third, markets do not clear instantaneously, with prices adjusting gradually. For simplicity, I study the case of two technologies and two labour markets, one for skilled and one for unskilled labour. The model is investigated by means of local stability and computer numerical analysis. Two types of steady states obtain, each characterised by the complete specialization of production into one of the two technologies. Convergence towards the low-growth steady state, associated with the unskilled labour intensive technology, occurs under adverse structural conditions, such as marked initial skill shortage and high skill upgrade costs. This result of lock-in to the inferior steady state is interpreted as co-ordination failure, in that market forces do not always provide sufficient incentives to ensure a high-growth path

The DART general equilibrium model: A technical description

This paper provides a technical description of the Dynamic Applied Regional Trade (DART) General Equilibrium Model. The DART model is a recursive dynamic, multi-region, multi-sector computable general equilibrium model. All regions are fully specified and linked by bilateral trade flows. The DART model can be used to project economic activities, energy use and trade flows for each of the specified regions to simulate various trade policy as well as environmental policy scenarios, and to analyze the allocational and distributional impacts of these policies.Computable General Equilibrium model,Multi-Sector Recursive Dynamic Model,Climate Change,International Trade

You Won the Battle. What about the War? A Model of Competition between Proprietary and Open Source Software

Although open source software has recently attracted a relevant body of economic literature, a formal treatment of the process of com- petition with its proprietary counterpart is still missing. Starting from an epidemic model of innovation di?usion, we try to ?ll this gap. We propose a model where the two competing technologies depend on dif- ferent factors, each one speci?c to its own mode of production (prof- its and developers’ motivations respectively), together with network e?ects and switching costs. As the speed of di?usion of these tech- nologies is crucial for the ?nal outcome, we endogenize the parame- ter in?uencing it across the population of adopters. We ?nd that an asymptotically stable equilibrium where both technologies coexist can always be present and, when the propagation coe?cient is endogenous, it coexists with winner–take–all solutions. Furthermore, an increase in the level of the switching costs for one technology increases the num- ber of its adopters, while reducing the number of the other one. If the negative network e?ects increase for one of the two technologies, then the equilibrium level of users of that technology decrease.Increasing returns; Open-source software; Technological competition; Technology di?usion

Equilibrium Wage Distribution

Stiglitz addresses two types of imperfect information to expand on equilibrium wage distribution

Growth with competing technologies and bounded rationality

I develop a model of growth based on three assumptions: first, a variety of technologies characterised by different degrees of labour skill intensity, where technological change is localized; second, agents are boundedly rational, and the aggregate rule of motion of their behaviour follows a replicator dynamics; third, markets do not clear instantaneously, with prices adjusting gradually. For simplicity, I study the case of two technologies and two labour markets, one for skilled and one for unskilled labour. The model is investigated by means of local stability and computer numerical analysis. Two types of steady states obtain, each characterised by the complete specialization of production into one of the two technologies. Convergence towards the low-growth steady state, associated with the unskilled labour intensive technology, occurs under adverse structural conditions, such as marked initial skill shortage and high skill upgrade costs. This result of lock-in to the inferior steady state is interpreted as co-ordination failure, in that market forces do not always provide sufficient incentives to ensure a high-growth path. <br><br> alternative title: Growth With Competing TechnologiesAnd Bounded Rationality