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- Publisher
- Springer Journals
- Copyright
- 2008 Japanese Economic Association
- ISSN
- 1352-4739
- eISSN
- 1468-5876
- DOI
- 10.1111/j.1468-5876.2008.00459.x
- Publisher site
- See Article on Publisher Site
Abstract
Abstract In a two-sector model, where one of the sectors is monopolistically competitive and subject to increasing returns to scale but without love for variety, we analyse the effects of a balanced budget fiscal expansion. Such an expansion could increase the welfare of the representative individual, if elasticities of substitution in production and consumption are low. A reorganization of production takes place—increasing returns enabling a rise in real income.
Journal
The Japanese Economic Review – Springer Journals
Published: Sep 1, 2009
Keywords: economics, general; microeconomics; macroeconomics/monetary economics//financial economics; econometrics; development economics; economic history