Stages of Diversification in a Neoclassical World Recent research has documented a U-shaped industrial concentration curve over an economy’s development path. How far can neoclassical trade theory take us in explaining this pattern? We estimate the production side of the Heckscher-Ohlin model using industry data on 44 developed and developing countries for the period 1976-2000. Decomposing the ...

Introduction How are we to think of the fundamental causes of technological change? I should like to argue here-but not demonstrate-that standard neoclassical economic models perform poorly in explaining technological progress. In a recent paper, Edward Prescott (1997) has noted the failures of standard theory to explain the huge differences in incomes and productivity. Instead of criticizing s...

Neoclassical theoretical approaches dominate modern health economics. However, the peculiarities of healthcare provision are so unusual that neoclassical theory is especially unsuited to the area. Even mainstream health economists often abandon Paretian welfare considerations to focus on needs instead. Problems relating to uncertainty and externalities are also widely acknowledged. This article...

Risk-sharing in insurance is analyzed, with a view towards explaining the prevalence of deductibles. First we introduce, in a modern setting, the main concepts of the theory of risk-sharing in a group of agents. This theory we apply to the risk-sharing problem between an insurer and an insurance customer. We motivate the development through simple examples, illustrating some of the subtle point...

Two separate bodies of literature on stabilization give radically different results, yet these contradictions do not appear to have attracted any attention until now. The first arises from the neoclassical theory of stabilization and predicts that beneficial stabilization will always attract positive supply response. The second arises from the work of Newbery and Stiglitz and predicts 'perverse...

Since the work of Thomas Kuhn, the role of social factors in the scienti®c enterprise has been a major concern in the philosophy and history of science. In particular, conformity e€ects among scientists have been used to question whether science naturally progresses over time. Using neoclassical economic reasoning, this paper develops a formal model of scienti®c theory choice which incorporates...

Neoclassical transport simulation code (FORTEC-3D) applicable to non-axisymmetric configurations is developed. A new hybrid simulation model in which ion transport is solved by using the δ f Monte-Carlo method including the finite-orbit-width effects, while electron transport is solved by a reduced ripple-averaged kinetic equation, is adopted. This model makes it possible to simulate the dynami...

The impacts of information technology (IT) on total factor productivity (TFP) are assessed through an integrative framework of IT-induced externalities and IT-leveraged innovations. Based on network externalities and endogenous growth theory, our study aims to reconcile the seeming discrepancy between the recent observed evidence and the prediction by neoclassical growth theory. We argue that c...

Can neoclassical theory account for the Great Depression in the United States— both the downturn in output between 1929 and 1933 and the recovery between 1934 and 1939? Yes and no. Given the large real and monetary shocks to the U.S. economy during 1929–33, neoclassical theory does predict a long, deep downturn. However, theory predicts a much different recovery from this downturn than actually...