IDEAS home Printed from
   My bibliography  Save this article

Homothetic and Non-homothetic Scale Economies in Applied General Equilibrium Analysis


  • Lawrence C. McDonough


Oligopolists in the Harris general equilibrium trade model employ a homothetic or nonhomothetic constant elasticity of substitution decreasing cost function. The properties of the function are discussed and its empirical relevance is analyzed in the context of a multilateral free trade simulation. Results suggest that scale economies that do not rapidly diminish with increases in production-run lengths (as occurs in the fixed-cost paradigm) generate relatively large welfare and output changes under the simulation. Also, factor bias, as a departure from a homothetic technology, affects in an empirically significant manner both the optimal input ratios and the productive efficiency.

Suggested Citation

  • Lawrence C. McDonough, 1992. "Homothetic and Non-homothetic Scale Economies in Applied General Equilibrium Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 196-210, February.
  • Handle: RePEc:cje:issued:v:25:y:1992:i:1:p:196-210

    Download full text from publisher

    File URL:
    Download Restriction: only available to JSTOR subscribers

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. By Albert G. Schweinberger & Jens Suedekum, 2015. "De-industrialization and entrepreneurship under monopolistic competition," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1174-1185.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:25:y:1992:i:1:p:196-210. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.