The paper studies a two-sector monetary economy with two factors of production, labor and capital. The industrial sector has increasing returns to scale, the consumption sector non-increasing returns. All firms maximize profits and markets clear. For each rate of return on capital the model...

In September 2011, the US Environmental Protection Agency asked 12 economists how the benefits and costs of regulations should be discounted for projects that affect future generations. This paper summarizes the views of the panel on three topics: the use of the Ramsey formula as an organizing...

In September 2011, the US Environmental Protection Agency asked 12 economists how the benefits and costs of regulations should be discounted for projects that affect future generations. This paper summarizes the views of the panel on three topics -- the use of the Ramsey formula as an organizing...

We report a generalization of recent results on the existence of marginal cost pricing equilibria (MCPE) in economies with an increasing returns to scale industry. Our result makes no ad hoc assumptions which force the equilibrium to be on the efficiency frontier of the aggregate production...