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A NON‐SUBSTITUTION THEOREM WITH NON‐CONSTANT RETURNS TO SCALE AND EXTERNALITIES
Author(s) -
Fujimoto Takao,
Silva José A.,
Villar Antonio
Publication year - 2005
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2005.00205.x
Subject(s) - returns to scale , substitution (logic) , economics , externality , constant (computer programming) , mathematical economics , proposition , scale (ratio) , microeconomics , econometrics , production (economics) , physics , computer science , philosophy , epistemology , quantum mechanics , programming language
ABSTRACT An input–output model with non‐constant returns to scale and externalities is presented, and it is shown that in this model the non‐substitution theorem is still valid. More precisely, the quantity side of the theorem, i.e. the proposition on efficiency, remains valid, while there can be no equilibrium prices independent of final demand.