Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
969339 | Journal of Public Economics | 2004 | 33 Pages |
Abstract
This paper develops a general equilibrium theory of endogenous firm and class formation under non-contractibility with heterogeneous individuals. A collectivist economy, a private-ownership economy, and a mixed economy are compared on the basis of identical economic fundamentals (methodological symmetry). Each economic system generates specific inefficiencies so that none dominates the others in general. The main trade-off is between the welfare loss associated with risk-taking in the private-ownership economy and the informational problems in the collectivist economy. We then use this framework to study the political economy of transition between economic systems and provide detailed welfare results.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Gilles Duranton, Toni Haniotis,