How increasing returns leads to non-neutrality of money

In 1980 an economist called Yew-Kwang Ng published a paper called Macroeconomics with Non-perfect Competition to little acclaim. The paper was cited a few times, and someone wrote a response that entirely missed the point of his argument. The main argument of his paper was largely ignored. Yew-Kwang Ng has written essentially the same paperContinue reading “How increasing returns leads to non-neutrality of money”

Competition with increasing returns to scale

When I criticize mainstream economics for neglecting increasing returns to scale there is one argument that is always brought up. In its most basic form the argument goes: an industry with increasing returns to scale is a natural monopoly. Since most companies are not monopolies, increasing returns to scale must not be common. I haveContinue reading “Competition with increasing returns to scale”