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On the Production Efficiency of Full Employment under Production Externalities

Author

Listed:
  • Gang Li

    (Hitotsubashi University and Toyo University)

  • Akihiko Yanase

    (Nagoya University)

Abstract

We address whether it is efficient for all factors of production to be fully employed, even in the presence of production externalities, by considering two general formulations of production externalities categorized by source: output-generated production externalities and input-generated ones. Our answer is affirmative for the former case, while it could be negative for the latter.

Suggested Citation

  • Gang Li & Akihiko Yanase, 2016. "On the Production Efficiency of Full Employment under Production Externalities," Economics Bulletin, AccessEcon, vol. 36(4), pages 2482-2490.
    • Handle: RePEc:ebl:ecbull:eb-16-00507
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I4-P240.pdf
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    References listed on IDEAS

    as
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    7. Li, Gang & 李, 綱, 2015. "The Production Possibility Frontier under Strong Input-generated Externalities," CCES Discussion Paper Series 57, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
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    More about this item

    Keywords

    Production efficiency; Full employment; Output-generated production externalities; Input-generated production externalities;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H0 - Public Economics - - General

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