The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Returns to Scale

  • John Eatwell
Reference work entry


The technique of production of a commodity y may be characterized as a function of the required inputs xi:If all inputs are multiplied by a positive scalar, t, and the consequent output represented as tsy, then the value of s may be said to indicate the magnitude of returns to scale.


Constant returns Decreasing returns Dynamic increasing returns Increasing returns Indivisibilities Returns to scale Substitution Technical change 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. Kaldor, N. 1966. Causes of the slow rate of economic growth in the United Kingdom. Cambridge: Cambridge University Press.Google Scholar
  2. Marshall, A. 1890. Principles of economics. 9th (Variorum) edn. London: Macmillan, 1961.Google Scholar
  3. Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations. London: Methuen, 1961.Google Scholar
  4. Sraffa, P. 1925. Sulla relazioni fra costo e quantità prodotta. Annali di Economia 2: 277–328.Google Scholar
  5. Sraffa, P. 1926. The laws of returns under competitive conditions. Economic Journal 36: 535–550.CrossRefGoogle Scholar
  6. Young, A.A. 1928. Increasing returns and economic progress. Economic Journal 38: 527–542.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • John Eatwell
    • 1
  1. 1.