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Economies of Scale and Imperfect Competition in an Applied General Equilibrium Model of the Australian Economy

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Increasing Returns and Economic Analysis

Abstract

In a pioneering paper, Harris (1984) emphasized the importance of imperfect competition and economies of scale in understanding the effects of trade liberalization on the Canadian economy within an applied general equilibrium framework. He argued that a general equilibrium analysis which incorporates scale economies and imperfect competition yields significantly different results from one that does not. Thus, his estimated static long-run gains to Canada of trade liberalization were in the range of 8–12% of GNP: considerably larger than those suggested by conventional estimates which assume perfect competition.

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© 1998 Palgrave Macmillan, a division of Macmillan Publishers Limited

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Abayasiri-Silva, K., Horridge, M. (1998). Economies of Scale and Imperfect Competition in an Applied General Equilibrium Model of the Australian Economy. In: Arrow, K.J., Ng, YK., Yang, X. (eds) Increasing Returns and Economic Analysis. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-26255-7_19

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