In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart, and Moore (GHM) model to absorb Maskin and Tirole's recent critique and Holmstrom and Milgrom's criticism...

This paper uses a dynamic general equilibrium model based on corner solutions to formalize the classical theory of investment and capital which considers investment to be a vehicle for developing a high level of division of labor in roundabout productive activities. If it takes time for a...

A general equilibrium model with increasing return to labor specialization and economies of transaction agglomeration is developed to address the residential land-rent escalation associated with the urbanization process, which is in turn endogenized as a result of the evolution of the division...