Consumption Externalities, Production Externalities, and the Accumulation of Capital

We analyze the effects of consumption and production externalities on the long-run rate of capital accumulation. We show that the importance of consumption externalities depends upon whether or not labor supply is fixed. In the case that it is fixed, they have no long-run effects. Whether they have any distortionary effect on the transitional path depends upon the form of utility function. The effects of production externalities are more pervasive; they exert long-run distortionary effects irrespective of labor supply. The optimal taxation to correct for the distortions created by the externalities is characterized. We analyze both stationary and endogenously growing economies, and while there are many parallels in how externalities impact, there are also important differences.

The Flatness of Mass-to-Light Ratio on Large Scales

It has been suggested that the mass-to-light ($M/L$) ratio of gravitationally clustering objects is scale-independent on scales beyond galaxy clusters, and may also be independent of the mass of the objects. In this paper, we show that the scale behavior of $M/L$ ratio is closely related to the scaling of cosmic structures larger than clusters. The scale dependence of the $M/L$ ratio can be determined by comparing the observed scaling of richness function (RF) of multi-scale identified objects with the model-predicted scaling of mass function (MF) of large scale structures. Using the multi-scale identified clusters from IRAS 1.2 Jy galaxy survey, we have made comparisons of the observed RF scaling of IRAS $r_{cl}$-clusters with the MF scalings given by simulations of three popular models SCDM, LCDM and OCDM. We find that, the M/L ratio basically is scale-independent from the Abell radius up to about 24 $h^{-1}$Mpc, while it seems to show a slight, but systematical, increase over this scale range. This result is weakly dependent on the cosmological parameters.Comment: AAS Latex file, 8 pages+ 4 figures, accepted for publication in ApJ