Smithian General Equilibrium and Its Welfare Implications

Xiaokai Yang and Wai-Man Liu
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Wai-Man Liu: University of New South Wales, Australia

Chapter 3 in Inframarginal Economics, 2008, pp 59-89 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe following sections are included:Neoclassical vs. Smithian General EquilibriumHow Does the Market Coordinate the Division of Labor and Utilize Network Effects?Structure, corner equilibrium, and resource allocation for a given structure of division of laborGeneral equilibrium level and structure of division of labor – how does the market coordinate division of labor to utilize network effectsInframarginal Comparative Statics of Smithian General EquilibriumInframarginal vs. marginal comparative statics of Smithian general equilibriumComparative statics of decisions vs. comparative statics of equilibriumThe inappropriateness of marginal cost pricing and the difference between neoclassical and Smithian general equilibriumEfficiency of the Invisible HandThe first welfare theorem in the Smithian frameworkEconomic development and disparity between the pareto optimum and the PPFInterdependence and conflict between efficient resource allocation and efficient organizationFurther ReadingQuestionsExercises

Keywords: Inframarginal Economics; Inframarginal Analysis; Division of Labor; Specialization; Network Effects; Smithian Framework; Transaction Costs (search for similar items in EconPapers)
JEL-codes: O30 (search for similar items in EconPapers)
Date: 2008
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