We explore the intersection of growth theory and the theory of the firm with an experiment. Economic growth is possible in our experiment when agents specialize to exploit increasing returns. We find that low opportunity costs are sufficient for Marshallian internal economies, but that...

This paper looks at the influence (or lack of influence) that ideas to do with the division of labour have had on the mainstream economic theory of the firm. The notion of the division of labour goes back, at least, to ancient India, the ancient Greeks and the ancient Chinese but it took two...