We develop a model of international trade with increasing returns to scale by taking into account the possibility of cooperation among agents in an egalitarian economy. It is shown that each country gains from trade in a trading world in which there are arbitrary numbers of...

The classical gains-from-trade conjecture was finally given a thorough Arrow-Debreu proof in 1972. Since then, the proposition has been repeatedly challenged. Some of the challenges rest on grounds which in no respect violate Arrow-Debreu assumptions. Those challenges are therefore without...

The Frankel, Romer and Lucas theories of endogenous growth rest on the assumptions of knowledge-based externalities and price-taking representative agents. It is argued that, in a context of long-run growth, these assumptions are mutually incompatible, that representative agents will cooperate...

It is argued that the task of describing the optimal vector of commodity taxes is trivialized by the traditional assumption of a price-taking representative agent; that, in particular, the assumption of a representative agent ensures that the null vector is optimal. Copyright © 2007 The...