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Specialization, Information, and Growth: A Sequential Equilibrium Analysis

Listed author(s):
  • Ng, Yew-Kwang
  • Yang, Xiaokai

Pricing costs and information problems are introduced into a framework with consumer-producers, economies of specialization, and transaction costs, to predict the endogenous and concurrent evolution of the division of labor and of information concerning economic organization acquired by society. Concurrent evolution generates endogenous growth based on the tradeoff between gains from information about the efficient pattern of the division of labor--which can be acquired via experiments with various patterns--and experimentation costs, which relate to the costs of discovering prices. The concept of Walras sequential equilibrium is developed to analyze the social learning process which is characterized by uncertainties in the direction of the evolution and by a certain trend of the evolutionary process. Copyright 1997 by Blackwell Publishing Ltd

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 1 (1997)
Issue (Month): 3 (October)
Pages: 257-274

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Handle: RePEc:bla:rdevec:v:1:y:1997:i:3:p:257-74
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  1. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
  2. Xiaokai Yang, 2006. "Development, Structural Changes And Urbanization," World Scientific Book Chapters,in: Inframarginal Contributions To Development Economics, chapter 7, pages 137-166 World Scientific Publishing Co. Pte. Ltd..
  3. Kreps, David M & Wilson, Robert, 1982. "Sequential Equilibria," Econometrica, Econometric Society, vol. 50(4), pages 863-894, July.
  4. Philippe Aghion & Patrick Bolton & Christopher Harris & Bruno Jullien, 1991. "Optimal Learning by Experimentation," Review of Economic Studies, Oxford University Press, vol. 58(4), pages 621-654.
  5. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  6. Sanford Grossman, 1989. "The Informational Role of Prices," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262572141, January.
  7. Xiaokai Yang & Jeff Borland, 2005. "A Microeconomic Mechanism For Economic Growth," World Scientific Book Chapters,in: An Inframarginal Approach To Trade Theory, chapter 18, pages 409-436 World Scientific Publishing Co. Pte. Ltd..
  8. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
  9. Grossman, Gene M & Helpman, Elhanan, 1989. "Product Development and International Trade," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1261-1283, December.
  10. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
  11. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
  12. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
  13. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
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