ANU Trevor Swan
Distinguished Lectures in Economics

INCREASING RETURNS & ECONOMIC EFFICIENCY

Yew-Kwang Ng - Professor of Economics, Moansh University

Italian economist Vilfredo Pareto’s concept of efficiency – Pareto optimality – is central to economic theory. A Pareto improvement is a reallocation of resources where at least one individual is made better off without making anyone else worse off. When no further Pareto improvements can be made, an allocation is said to be Pareto optimal.


In this lecture, Professor Yew-Kwang Ng argues that from the viewpoint of Pareto optimality, industries with increasing returns are smaller than desired relative to those without increasing returns. As a result, subsidising industries with increasing returns, financed by taxes on goods produced by industries with lower or decreasing returns, may increase efficiency. He will argue this result for general and specific cases.

  

Seminar Flyer

1. Increasing Returns and Economic Efficiency

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