Externalities, Internalization and Fluctuations

Externalities, Internalization and Fluctuations

In this paper we introduce consumption externalities as developed by Arrow in overlapping-generations economies. We show how the internalization of externalities-through exchanges at markets for externalities-may give rise to new phenomena such as altered stability properties and fluctuations, even...

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Veröffentlicht in:International economic review (Philadelphia) 1997-05, Vol.38 (2), p.465-477
Hauptverfasser: Crès, Hervé, Ghiglino, Christian, Tvede, Mich
Format: Artikel
Sprache:eng
Schlagworte:
Budget constraints
Business cycles
Competition
Consumer economics
Consumer equilibrium
Consumers
Consumption
Consumption function
Economic externalities
Economic fluctuations
Economic models
Economic theory
Economics and Finance
Endowment
Equilibrium
External economies
Externalities
Externality
Humanities and Social Sciences
Steady state economies
Studies
Utility functions
Welfare economics
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Beschreibung
Zusammenfassung:In this paper we introduce consumption externalities as developed by Arrow in overlapping-generations economies. We show how the internalization of externalities-through exchanges at markets for externalities-may give rise to new phenomena such as altered stability properties and fluctuations, even though it restores optimality.
ISSN:0020-6598
1468-2354
DOI:10.2307/2527384