Trade and Communication

Don Lamberton

Chapter 8 in Creating an Internationally Competitive Economy, 2001, pp 145-154 from Palgrave Macmillan

Abstract: Abstract In the Feiwel interview, Arrow (1987a, p. 213) took the view that the usual general equilibrium theory tends to predict convergence, noting that convergence might be very slow because all countries have very different capital structures. Elsewhere, he mentioned ‘an inextricable mixture of individual differences and productivity effects’ and warned against the assumption of homogeneous agents: ‘If agents are all alike, there is really no room for trade’ (Arrow, 1987b, p. 205). This mind-set leads towards a stable future in which new information is unwanted: towards a vision of a ‘world [that] has been made safe for optimisation, and hostile to innovation’ (Davies, 1967, p. 320). To counter this, we need to look closely at the homogeneity assumption and consider carefully what is included in capital structures.

Keywords: Capital Structure; Wide Perspective; Real Investment; Information Perspective; Stable Future (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-55706-2_8

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230557062

DOI: 10.1057/9780230557062_8

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().