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Applied Theory Research
- What
is inframarginal Economics?
With the sound (pure) theoretical foundation
of inframarginal analysis of general increasing returns and network
effects of division of labor, many applied theory papers have explored
the implications of the new framework for trade theory, macroeconomics,
theories of the firm, urbanization, industrialization, hierarchical
network, development economics, property rights, business cycle, unemployment,
capital, and etc.
The focus of the papers is on effects of trading efficiency, which
could be affected by the institution of the firm, hierarchical structure
of transactions and contracts, money, the institution of government,
opportunism (associated with moral hazard, adverse selection, cheating,
stealing, and tariff), urbanization, insurance, structure of property
rights and ownership, and bundling sale, on the network size of division
of labor and interplays among equilibrium topological properties of
economic organisms, prices, and resource allocation. For instance,
inframarginal comparative statics of general equilibrium in the models
show that as parameter values of trading efficiency and production
condition shift between parameter subspaces which demarcate various
structures of division of labor, transactions, property rights, and
contracts, the general equilibrium discontinuously jumps across the
structures, resulting in endogenous changes in level of division of
labor, monetary regime, trade pattern, structure of property rights,
transactions, contracts, and institution. Income share of transaction
cost may increase in response to the emergence of money, improvements
in trading efficiency, and evolution in division of labor that generates
productivity progress. Aggregate reliability of the network of division
of labor may decrease and aggregate risk of coordination failure of
division of labor may increase as a consequence of expansion of network
of division of labor which generates productivity progress as well
as a high degree of connectedness of integrated market. Several dynamic
models in this literature has explored spontaneous (or endogenous)
coevolution in division of labor, trading efficiency, number of traded
goods, number of available goods, per capita income, optimum government
tax rate, size of government revenue, and market integration.
Since much of early applied theory research
in this literature is reviewed in Yang and Y-K. Ng (1993), Yang and
S. Ng (1998), and Yang (2001), I shall outline the recent work in
this strand of the literature.
Inframarginal analysis of trade theory: Cheng,
Sachs, and Yang (2000a) show that government trade policy regime,
equilibrium network size of division of labor, and aggregate productivity
are interdependent in a Ricardian model. This paper shows that as
transportation efficiency is improved, the general equilibrium discontinuously
jumps from autarky to the partial division of labor, where the country
producing both goods would impose a tariff and the country producing
a single good would prefer unilateral free trade, followed by the
complete division of labor where both countries would negotiate on
tariff rates to achieve free trade. In a model with three countries,
the country which does not have a comparative advantage relative to
the other two countries and/or which has low transaction efficiency
may be excluded from trade. Cheng, Sachs, and Yang (1999, 2000b) have
applied inframarginal analysis to the HO model with exogenous technological
as well as endowment comparative advantages to obtain similar results.
Cheng, Liu, and Yang (2000) and Yang, and Zhang (2000, forthcoming)
have applied inframarginal analysis to models with endogenous as well
exogenous comparative advantages to study interplays between trade
policy regime, dual structure, income distribution, and network size
of division of labor. Sachs, Yang, and Zhang (forthcoming) have applied
inframarginal analysis to the Dixit-Krugman models to explain discontinuous
jumps of trade pattern by interplays among endogenous and exogenous
comparative advantages in technology, endowments, and transaction
efficiencies. D. Yang (2001) and G. Li (2001) have applied inframarginal
analysis to investigate the relationship between international trade,
foreign direct investment, and network size of division of labor.
Liu and Yang (2000), Sun (2000), and Zhang
(2000, 2001) have formalized the theory of irrelevance of the size
of the firm and found empirical evidence for this theory.
Inframarginal analysis of externality, public
goods, and endogenous transaction costs: Chu and Wang (1998), Y-K.
Ng and S. Ng 2001a, b, and Ng and Yang (2000) have introduced externalities
into models of endogenous specialization to investigate effects of
externalities on the extent of the market and network size of division
of laobr, Yang (2000), Yang and Yeh (forthcoming) have introduced
moral hazard into a model of endogenous specialization to investigate
effects of the endogenous transaction costs caused by moral hazard
on the extent of the market and network size of division of labor.
Yang and Zhao (2000) use several game models to investigate interplays
among endogenous and exogenous transaction costs caused by bargaining
and network size of division labor. All of the models can predict
concurrent increases in endogenous transaction costs, aggregate productivity,
and the wealth of a nation as consequences of evolution in division
of labor.
Yang (2000) absorbs recent criticisms of Hart's
theory of incomplete contract by Maskin, Milgrom, and Homstrom. He
introduces two-sided moral hazard into the Yang-Ng model of endogenous
specialization and endogenous emergence of the firm. This model save
the essential story in the Grossman-Hart-Moore model by absorbing
technical substance in Maskin critique.
Trade Theory:
- Wen Li Cheng, Jeffrey Sachs & Xiaokai Yang, A
General Equilibrium Re-appraisal of the Stolper-Samuelson Theorem.
(trade Theory, general equilibrium HO model, Stolper-Samuelson theorem)
- Wenli Cheng, Jeffrey Sachs & Xiaokai Yang, An
Inframarginal Analysis of the Ricardian Model. (Trade Theory)
- Jeffrey Sachs, Xiaokai Yang & Dingsheng Zhang, Pattern
of Trade and Economic Development in the Model of Monopolistic Competition.
(Income distribution, division of labor, dual structure, economic
development, trade pattern, monopolistic competition, economies
of scale, inframarginal analysis)
- Xiaokai Yang & Dingsheng Zhang, Economic
Development, International Trade, and Income Distribution. (Income
distribution, division of labor, dual structure, economic development)
- Wenli Cheng, Jeffrey Sachs & Xiaokai Yang, An
Inframarginal Analysis of the Heckscher-Ohlin Model with Transaction
Costs and Technological Comparative Advantage. (H-O theorem,
factor equalization theorem, Stolper-Samuelson theorem, Rybczynski
theorem)
- Jeffrey Sachs, Xiaokai Yang, Dingsheng Zhang, Globalization,
Dual Economy, and Economic Development.
- Xiaokai Yang & Yongsheng Zhang, Tests
of Scale Effects Predicted by the Dixit-Stiglitz Model. (Scale
effect, Firm Size, the Dixit-Stiglitz Model)
- Wenli Cheng, Meng-chun Liu & Xiaokai Yang, "A
Ricardian Model with Endogenous Comparative Advantage and Endogenous
Trade Policy Regimes".
- [From Economics: New Classical Versus Neoclassical Frameworks]
-------------
Chapter
11. Emergence of International Trade from Domestic Trade
and Emergence of New Products
11.1. Endogenous Trade Theory and Endogenous Number of Consumer
Goods
11.2. A New Classical Trade Model with Fixed Learning Costs
11.3. How are Demand and Supply Functions Determined by Individuals'
Levels of Specialization
11.4. Inframarginal Comparative Statics of the Optimum Decisions
11.5. How is the Level of Division of Labor in Society Determined
in the Market
11.6. Inframarginal Comparative Statics of General Equilibrium
and
Many Concurrent Economic Phenomena
11.7. Emergence of International Trade from Domestic Trade
11.8. Comovement of Division of Labor and Consumption Variety
11.9. Trade off Between Economies of Specialization and Coordination
Costs
11.10. A Neoclassical Model Endogenizing the Number of Consumption
Goods on the Basis of the Trade off Between Economies of Scale
and Consumption Variety
11.11. An Extended Murphy-Shleifer-Vishny Model with Compatibility
between Economies of Scale and Competitive Market
-------------
Chapter
12: Exogenous and Endogenous Comparative Advantages,
Division of Labor, and Trade
12.1. Endogenous vs. Exogenous Comparative Advantage 296
12.2. A Ricardian Model with Exogenous Comparative Technological
Advantage and Transaction Costs
12.3. Analysis of Decisions vs. Analysis of Equilibrium
12.4. Economic Development and Trade Policy
12.5. Comparative Endowment Advantage and Transaction Efficiency
Labor Economics
- Monchi Lio, Effects
of Insurance and Moral Hazard on the Division of Labor and Productivity.
(the division of labor, insurance, moral hazard, endogenous transaction
costs)
- Monchi Lio & Xiaokai Yang, The
Division of Labor and the Allocation of Time. (division of labor
and time allocation, transaction cost)
- Guang-Zhen Sun & Yew-Kwang Ng, "Time
Is More Precious For The Young, Life Is More Valuable For The Old".
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
15: The Trade off Between Work and Leisure and Impacts of
the Resource Scarcuty and Population Size on the Division of Labor
15.1. Why Can Division of Labor Enlarge the Scope for the Efficient
Trade off
Between Work and Leisure 390
15.2. Why Leisure Time and Per capita Consumption of Each Goods
Increase
as Division of Labor Develops
15.3. Why Can Crisis of Resource Shortage Promote Evolution in
Division of Labor and Productivity
15.4. Implications of High Population Density for Evolution in
Division of Labor
through Its Effect on Per capita Investment Cost of Infrastructure
Bounded Rationality
- Xiaokai Yang & Shuntian Yao, Walrasian
Sequential Equilibrium, Bounded Rationality, and Social Experiments.
(Pure Theory)
Globalization:
- Globalization
and Economic Analysis --- On Prof. James Buchanan's Visit to Monash
University.
- Wen Li Cheng, Jeffrey Sachs & Xiaokai Yang, A
General Equilibrium Re-appraisal of the Stolper-Samuelson Theorem.
(trade Theory, general equilibrium HO model, Stolper-Samuelson theorem)
- Xiaokai Yang, China's
Entry to the WTO. (Globalization Issue)
- Jeffrey Sachs & Xiaokai Yang, Market
Led Industrialization and Globalization. (Globalization Issue)
- Wenli Cheng, Jeffrey Sachs & Xiaokai Yang, An
Inframarginal Analysis of the Ricardian Model. (Trade Theory)
- Jeffrey Sachs, Xiaokai Yang & Dingsheng Zhang, Pattern
of Trade and Economic Development in the Model of Monopolistic Competition.
(Income distribution, division of labor, dual structure, economic
development, trade pattern, monopolistic competition, economies
of scale, inframarginal analysis)
- Xiaokai Yang & Dingsheng Zhang, Economic
Development, International Trade, and Income Distribution. (Income
distribution, division of labor, dual structure, economic development)
- Wenli Cheng, Jeffrey Sachs & Xiaokai Yang, An
Inframarginal Analysis of the Heckscher-Ohlin Model with Transaction
Costs and Technological Comparative Advantage. (H-O theorem,
factor equalization theorem, Stolper-Samuelson theorem, Rybczynski
theorem)
- Xiaokai Yang, Incomplete
Contingent Labor Contract, Asymmetric Residual Rights and Authority,
and the Theory of the Firm. (Application Thoery)
- Jeffrey Sachs, Xiaokai Yang, Dingsheng Zhang, Globalization,
Dual Economy, and Economic Development.
- Xiaokai Yang, The
Crisis of Success and Feedback Quality in Managing Economic Crisis
(Application Theory)
- Monchi Lio, Effects
of Insurance and Moral Hazard on the Division of Labor and Productivity.
(the division of labor, insurance, moral hazard, endogenous transaction
costs)
- Wenli Cheng, Meng-chun Liu & Xiaokai Yang, "A
Ricardian Model with Endogenous Comparative Advantage and Endogenous
Trade Policy Regimes".
Case Study
- Jeffrey Sachs, Wing Thye Woo & Xiaokai Yang, Economic
Reforms and Constitutional Transition. (Political Economy)
E-Commerce
- Ke Li & Xiaokai Yang, A
General Equilibrium Model with Impersonal Networking Decisions and
Bundling Sales. (Application Theory, E-commerce)
- Dingsheng Zhang, He-Ling Shi & Xiaokai Yang, "A
General Equilibrium Model of e-Commerce with Impersonal Networking
Decisions".
- Chu, Chih-Ning & Chou, Jerome, "A
Criterion from the General Equilibrium Model on Providing an Open
or a Closed Source Software".
- Heling Shi & Hayden Mathysen, "E-commerce,
transaction cost, and the network of division of labour: a business
perspective".
Empirical Study
- Been-Lon Chen, Chien-fu Jeff Lin & Xiaokai Yang, Empirical
Evidence for Sequential Divergence and Convergence. (Empirical
Research)
- Pak-Wai Liu & Xiaokai Yang, The
Theory of Irrelevance of the Size of the Firm. (size of the
firm, division of labor, theory of the firm)
- Xiaokai Yang & Yongsheng Zhang, Tests
of Scale Effects Predicted by the Dixit-Stiglitz Model. (Scale
effect, Firm Size, the Dixit-Stiglitz Model)
- Empirically validating Adam Smith's theory of division of labor
with structural equation modeling (Abstract
& Slide)
- A
Note about Applying LISREL on Economics Empirical Analysis
Political Economics
- Wai-Man Liu & Xiaokai Yang, Effects
of Political Monopoly of the Ruling Elite on the Extent of the Market,
income distribution, and Development.
- Jeffrey Sachs, Wing Thye Woo & Xiaokai Yang, Economic
Reforms and Constitutional Transition. (Political Economy)
- Sugata Marjit & Heling Shi "On
Controlling Crime with Corrupt Officials".
Public Economics
- Ng, Yew-Kwang & Siang Ng, (2001a), 'Specialization, Network
Externalities, and Work Ethics.' Working Paper, Department of Economics,
Monash University. (forthcoming in JEBO with Buchanan’s reply)
- Ng, Yew-Kwang & Siang Ng, (2001b), 'Why It May Be Desirable
to Encourage Improvements in Transaction Efficiency: Economies of
Specialization and Network Externalities.' (paper presented to the
July 2001 Monash U conference on e-commerce)
- Mei Wen, "Infrastructure
and Evolution in Division of Labour".
Macroeconomics Economics
- Mei Wen, "Infrastructure
and Evolution in Division of Labour".
- Heling Shi, "On
the Micro Aspects of the Economic Miracle and Finance Crisis in
Asia".
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
25: Theory of Capital and Saving
Chapter
26: Money and Division of Labor
Chapter
27: New Classical Theory of Business Cycles and Unemployment
Theory of Urbanization:
- Yang, X. and Rice, R. (1994), "An Equilibrium Model Endogenizing
the Emergence of a Dual Structure between the Urban and Rural Sectors",
Journal of Urban Economics, Vol. 25, 346-68.
- Sun, G. and Yang, X. (2001), "Evolution in Division of Labor,
Urbanization, and Land Price Differentials between the Urban and
Rural Areas," Australian Economic Papers, forthcoming.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
14: Urbanization, Dual Structure Between Urban and Rural Areas,
and the Division of Labor
14.1. Why and How Cities Emerge from the Division of Labor?
14.2. Emergence of Cities and of the Dual Structure Between Urban
and Rural Areas
14.3. Why Can Geographical Concentration of Transactions Improve
Transaction Efficiency
14.4. Simultaneous Endogenization of Level of Division of Labor,
Location Pattern of Residences,
Geographical Pattern of Transactions, and Land Prices
14.5. Fujita-Krugman Model of Urbanization
Theory of Industrialization:
- Sun, G. and Lio, M. (1996), "A General Equilibrium Model
Endogenizing the Level of Division of Labor and Variety of Producer
Goods", Working Paper, Department of Economics, Monash University.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
19: Industrialization and the Division of Labor in Roundabout Production
19.1. The Features of Industrialization
19.2. A General Equilibrium Model Endogenizing Production Roundaboutness
19.3. Corner Equilibria and Emergence of New Industry
19.4. General Equilibrium and Industrialization
19.5. Changes in the Income Shares of the Industrial and Agricultural
Sectors
19.6. The Number of Possible Structures of Transactions Increases
More Than Proportionally as
Division of Labor Evolves in Roundabout Production
Hierarchical Network
- Xiaokai Yang, An
Equilibrium Model of Hierarchical Network.
- Shi, Heling, and Yang, Xiaokai, (1998) "Centralized
Hierarchy within a Firm and Decentralized Hierarchy in the Market",
in Increasing Returns and Economic Analysis, eds. Arrow, Kenneth,
Ng, Yew-Kwang and Xiaokai Yang, Macmillan, 145-169 (abstract, full-text).
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
20: Hierarchical Structure of the Network of Division of Labor and
Related Transactions
20.1. The Theory of Hierarchy
20.2. One Way Centralized Hierarchy
20.3. A Decentralized Hierarchy of Transactions and the Division
of Labor
20.4. Configurations and Market Structures
20.5. The General Equilibrium and Its Inframarginal Comparative
Statics
20.6. Network Hierarchy of Cities and Division of Labor
20.6.1 Consumer-producers, Cities, and Layers of a Hierarchy of
Cities
20.6.2 Two Types of Transaction Costs
Growth Theory
- Borland, J. and Yang, X. (1995), "Specialization, Product
Development, Evolution of the Institution of the Firm, and Economic
Growth", Journal of Evolutionary Economics, 5, 19-42.
- Yang, X. and Borland, J. (1991a), "A Microeconomic Mechanism
for Economic Growth", Journal of Political Economy, 99, 460-82.
- Wen, M. (1997), "Infrastructure and Evolution in Division
of Labor", Review of Development Economics,1,191-206.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
22: Economic Growth Generated by Endogenous Evolution in Division
of Labor
22.1. Economies of Specialized Learning by Doing and
Endogenous Evolution in Division of Labor
22.2. A New Classical Dynamic Model with Learning by Doing
22.3. Optimum Speed of Learning by Doing and Evolution of Endogenous
Comparative Advantage
22.3.1 The Function of Contracts
22.3.2 An Individual's Dynamic Decision Problem
22.3.3 Dynamic Equilibrium
22.3.4. Various Economic Growth Patterns Generated by the Evolution
of Division of Labor
22.4. Endogenous Evolution of the Extent of the Market, Trade
Dependence,
Endogenous Comparative Advantages, and Economic Structure
22.5. Empirical Evidences and Rethinking Development Economics
and
Endogenous Growth Theory
Appendix 22.1: The Relationship between the Control Theory and
Calculus of Variabtions
Development Economics
- (Book) Sachs, J. and Yang, X. (2001), Development Economics: Inframarginal
Versus Marginal Analyses, Cambridge, MA., Blackwell.
- Sachs, J., Yang, X. and Zhang, D. (2001), "Patterns of Trade
and Economic Development in the Model of Monopolistic Competition."
Review of Development Economics, forthcoming.
- Yang, X. and Shi, H. (1992), "Specialization and Product
Diversity," American Economic Review, 82, 392-98.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
21: Neoclassical Models of Economic Growth
Chapter
22: Economic Growth Generated by Endogenous Evolution in Division
of Labor
Chapter
23: Concurrent Endogenous Evolution in Division of Labor, in the
Number of Goods, and in the Institution of the Firm
Chapter
24: Experiments with Structures of Division of Labor and Evolution
in Organization Information Acquired by Society
Theory of Endogenous Externality, Public Goods and Endogeneous Transaction
Costs
- Chu, C. (1997), "Productivity, Investment in Infrastructure,
and Population Size: Formalizing the Theory of Ester Boserup",
Review of Development Economics, 1, 294-304.
- Chu, C. and Wang, C. (1998), "Economy of Specialization and
Diseconomies of Externality", Journal of Public Economics.
69, 249-61.
- Lio, M. (1996), Three Assays on Increasing Returns and Specialization:
A Contribution to New Classical Microeconomic Approach, Ph.D. Dissertation,
Department of Economics, the National Taiwan University.
- Lio, M. (1998), "Uncertainty, Insurance, and Division of
Labor," Review of Development Economics, 2, 76-86.
- Ng, Yew-Kwang & Siang Ng, (2001a), 'Specialization, Network
Externalities, and Work Ethics.' Working Paper, Department of Economics,
Monash University. (forthcoming in JEBO with Buchanan’s reply)
- Ng, Yew-Kwang & Siang Ng, (2001b)'Why It May Be Desirable
to Encourage Improvements in Transaction Efficiency: Economies of
Specialization and Network Externalities.' (paper presented to the
July 2001 Monash U conference on e-commerce)
- Yang, X. (2000), "Incomplete Contingent Labor Contract, Asymmetric
Residual Rights and Authority, and the Theory of the Firm."
Seminar Paper, Department of Economics, Monash University.
- Yang, X. and Yeh, Y. (forthcoming), "A General Equilibrium
Model with Endogenous Principal-agent Relationship," Australian
Economic Papers.
- Fang, Xinghai and Zhu, Tian (1999), "Institutional Imperfection
and Transition Strategies," Economic Systems, 23, 331-48.
- Ng, Y-K. and Yang, X. (2000) " Effects of Taxation on the
Extent of the Market and Network Size of Division of Labor,"
Working Paper, Department of Economics, Monash University.
- Liu, Wai-Man, and Xiaokai Yang, (2001), "Good Capitalism
versus Bad Capitalism: Effects of Political Monopoly of the Ruling
Elite on the Extent of the Market, Income Distribution, and Development,"
Department of Economics Discussion Papers, No. 01/01, ISSN 1441-5429,
Monash University.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
10: Endogenous Transaction Costs and Theory of Contract,
Ownership, and Residual Rights
10.1. Endogenous Transaction Costs and Moral Hazard
10.2. Neoclassical Principal-agent Models
10.3. A New Classical General Equilibrium Model of Principal-agent
10.4. The Trade off Between Endogenous Transaction Costs caused
by Moral Hazard and Monitoring Cost
10.5. The Grossman-Hart-Moore Model of Optimal Ownership Structure
10.6. Non-credible Commitment and Soft Budget Constraint
Economics of E-Business & Internet
- Li, Ke, (2001), A General Equilibrium Analysis of the Division
of Labour: Violation and Enforcement of Property Rights, Impersonal
Networking Decisions and Bundling Sale, Ph.D. Thesis, Department
of Economics, Monash University.
Economics of State
- Liu, Wai-Man, and Xiaokai Yang, (2001), "Good Capitalism
versus Bad Capitalism: Effects of Political Monopoly of the Ruling
Elite on the Extent of the Market, Income Distribution, and Development,"
Department of Economics Discussion Papers, No. 01/01, ISSN 1441-5429,
Monash University.
- Li Ke & Russell Smyth, "Division of Labour, Specialization
and the Enforcement of a System of Property Rights: A General Equilibrium
Analysis", Department of Economics Discussion Papers, No. 12/01,
ISSN 1441-5429, Monash University.
Monetary Theory
- Cheng, W. (1998),"Specialization and the Emergence and the
Value of Money", In K. Arrow, Y-K. Ng, and X. Yang eds. Increasing
Returns and Economic Analysis, London, Macmillan.
- Cheng, W. (1999), "Division of Labor, Money, and Economic
Progress", Review of Development Economics, 3, 354-67.
- Yang, X. and Ng, Y-K. (1993), Specialization and Economic Organization,
a New Classical Microeconomic Framework, Amsterdam, North-Holland.
Theory of Capital and Investment
- Yang, X. (1999), "The Division of Labor, Investment, and
Capital", Metroeconomica. 50, 301-24.
- Yang, X. and Borland, J. (1991a), "A Microeconomic Mechanism
for Economic Growth", Journal of Political Economy, 99, 460-82.
- Wen, M. (1997), "Infrastructure and Evolution in Division
of Labor", Review of Development Economics,1,191-206.
- Wen, M. (1997), Division of Labor in Economic Development, Ph.D.
dissertation, Department of Economics, Monash University.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
25: Theory of Capital and Saving
25.1. Neoclassical Theory of Capital 628
25.2. New Classical Theory of Capital and Savings
25.2.1. The Model
25.2.2. Configuration Sequence and Structure Sequence
25.2.3. Dynamic Corner Equilibria in 16 Structure Sequences
25.3. Capital and Division of Labor in Roundabout Production
23.3.1. Dynamic General Equilibrium
25.3.3. Endogenous Decision Horizon and Effect of Liberalization
Reforms on Opportunity
for Lucrative Investment
Theory of Business Cycle
- Yang, X. and Ng, Y-K. (1993), Specialization and Economic Organization,
a New Classical Microeconomic Framework, Amsterdam, North-Holland.
(Ch. 18).
- Du, J. (forthcoming), "Endogenous, Efficient Long-run Cyclical
Unemployment, Endogenous Long-run Growth, and Division of Labor,"
Review of Development Economics.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
27: New Classical Theory of Business Cycles and Unemployment
27.1. Rethinking Macroeconomics
27.2. Long-run Regular Efficient Business Cycles, Cyclical Unemployment,
Long-run Economic Growth, and Division of Labor in Producing Durable
Goods
27.3. A New Classical Dynamic Equilibrium Model of Business Cycles
and Unemployment
27.4. Cyclical vs. non-cyclical Corner Equilibria
27.4.1 Regime Specification, Configurations and Market Structures
27.4.2 The Dynamic corner equilibrium in Autarky
27.4.3 Market Structure C
27.4.4 Market Structure P
27.4.5. Welfare and Policy Implications of the Model
27.5. General Price Level, Business Cycles, and Unemployment Rate
27.6. Emergence of Firms and Fiat Money from the Division of Labor
Theory of Insurance
- Lio, M. (1998), "Uncertainty, Insurance, and Division of
Labor," Review of Development Economics, 2, 76-86.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
17: Insurance and Risk of Coordination Failure of the Network
of Division of Labor
17.1. Uncertainty and Risk Aversion
17.2. A Model with Insurance and Endogenous Specialization in
the Absence of Moral Hazard
17.3. The Division of Labor and Endogenous Transaction Costs caused
by Complete Insurance
Theory of Firm and Contract
- Yang, X. and Ng, Y-K. (1995), "Theory of the Firm and Structure
of Residual Rights", Journal of Economic Behavior and Organization,
26, 107-28.
- Liu, Pak-Wai and Yang, Xiaokai (2000) "The Theory of Irrelevance
of the Size of the Firm," Journal of Economic Behavior and
Organization, 42, 145-65.
- Yang, X. and Yeh, Y. (forthcoming), "A General Equilibrium
Model with Endogenous Principal-agent Relationship," Australian
Economic Papers.
- Yang, X. (2000), "Incomplete Contingent Labor Contract, Asymmetric
Residual Rights and Authority, and the Theory of the Firm",
Seminar Paper, Department of Economics, Monash University.
- Sun, Guangzhen (2000), "The Size of the Firm and Social Division
of Labour." Australian Economic Papers. 39, 263-77.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
8: Labor Market and Institution of the Firm
8.1. What is the Institution of the Firm 190
8.2. Is It Fair to Have Asymmetric Relationship Between Boss and
Employees
-Story behind the Model
8.3. Emergence of the Firm from the Division of Labor 191
8.3.1. Economies of Roundabout Production
8.3.2. The Corner Equilibria in Four Structures
8.3.3. General Equilibrium Structure of Transactions and Residual
Rights
8.4. The Distinction Between ex ante and ex post Production Functions
and
the New Classical Analysis of Demand and Supply
8.5. Economies of Division of Labor, Economies of the Firm, and
Coase Theorem
Economics of Transaction Costs
- Lio, M. (1996), Three Assays on Increasing Returns and Specialization:
A Contribution to New Classical Microeconomic Approach, Ph.D. Dissertation,
Department of Economics, the National Taiwan University.
- Lio, M. (1998), "Uncertainty, Insurance, and Division of
Labor," Review of Development Economics, 2, 76-86.
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
10: Endogenous Transaction Costs and Theory of Contract,
Ownership, and Residual Rights
10.1. Endogenous Transaction Costs and Moral Hazard
10.2. Neoclassical Principal-agent Models
10.3. A New Classical General Equilibrium Model of Principal-agent
10.4. The Trade off Between Endogenous Transaction Costs caused
by Moral Hazard and Monitoring Cost
10.5. The Grossman-Hart-Moore Model of Optimal Ownership Structure
10.6. Non-credible Commitment and Soft Budget Constraint
Economics of Property Rights
- Yang, X. and Wills, I. (1990), "A Model Formalizing the Theory
of Property Rights", Journal of Comparative Economics, 14,
177-98.
- Lio, M. (1998), "Uncertainty, Insurance, and Division of
Labor," Review of Development Economics, 2, 76-86.
- Xiaokai Yang & Shuntian Yao, Walrasian Sequential Equilibrium,
Bounded Rationality, and Social Experiments. (Pure Theory)
- Pak-Wai Liu & Xiaokai Yang, The Theory of Irrelevance of the
Size of the Firm. (size of the firm, division of labor, theory of
the firm)
- Xiaokai Yang, Incomplete Contingent Labor Contract, Asymmetric
Residual Rights and Authority, and the Theory of the Firm. (Application
Thoery)
- Chu, Chih-Ning & Chou, Jerome, "A Criterion from the
General Equilibrium Model on Providing an Open or a Closed Source
Software".
- Sugata Marjit, Arijit Mukherjee and Heling Shi, "Cooperation
in R&D: The Case of Patent Infringement Agreements".
- Shi, Heling, and Yang, Xiaokai, (1998) "Centralized Hierarchy
within a Firm and Decentralized Hierarchy in the Market", in
Increasing Returns and Economic Analysis, eds. Arrow, Kenneth, Ng,
Yew-Kwang and Xiaokai Yang, Macmillan, 145-169 (abstract, full-text).
- [From Economics: New Classical Versus Neoclassical Frameworks]
Chapter
16: Economics of Property Rights and the Division of Labor
16.1. Uncertainties in Transactions and Economics of Property Rights
16.2. Trade offs among Economies of Division of Labor, Coordination
Reliability,
and Benefit of Competition
16.3. Endogenization of Coordination Reliability in Each Transaction
16.4. Substitution between Precise Enforcement of Property Rights
and Competition
Theory of Bounded Rationality and Impersonal Networking Decisions
- Ng, Y-K. and Yang, X. (1997), "Specialization, Information,
and Growth: a Sequential Equilibrium Analysis". Review of Development
Economics. 1, 257-74.
- Zhao, Y. (1999), "Information, Evolution of the Institution
of the Firm, and the Optimal Decision Horizon", Review of Development
Economics, 3, 336-53.
- [From Economics: New Classical Versus Neoclassical Frameworks]
-------------
Chapter
9: Pricing Mechanism Based on Bargaining
9.1. Bargaining Game, Strategic Behavior, Opportunistic Behavior
9.2. Nash Bargaining Game
9.3. Endogenous Transaction Costs caused by Information Asymmetry
9.4. Alternating Offer Bargaining Games
9.5. Dynamic Bargaining Game and the Division of Labor
9.6. How Does Competition for a Greater Share of Gains from the
Division of Labor
Generate Endogenous Transaction Costs
9.7. How Can Endogenous Transaction Costs be Eliminated by Consideration
of Reputation
-------------
Chapter
13: More General New Classical Models
13.1. Theoretical Foundation of New Classical Economics
13.2. A General New Classical Model with ex ante Different Consumer-producers
13.3. The Existence of Genral Equilibrium
13.4. Equilibrium Organism and Efficiency of the Invisible Hand
in Coordinating Division of Labor
13.5. A New Classical Model with Both Endogenous and Exogenous
Comparative Advantages
13.6. Trade Pattern and Income Distribution
Theory of Hierarchy
- Shi, H. , and Yang, X. (1998), "Centralised Hierarchy within
a Firm vs. Decentralised Hierarchy in the Market ", in K. Arrow,
Y-K. Ng, and X. Yang eds. Increasing Returns and Economic Analysis,
London, Macmillan.
- Yang, X. (2001) Economics: New Classical Versus Neoclassical Frameworks,
(Ch. 20), Blackwell Publishers.
Theory of the Firm
[From Economics: New Classical Versus Neoclassical
Frameworks]
Chapter
8: Labor Market and Institution of the Firm
8.1. What is the Institution of the Firm
8.2. Is It Fair to Have Asymmetric Relationship Between Boss and Employees
-Story behind the Model
8.3. Emergence of the Firm from the Division of Labor
8.3.1. Economies of Roundabout Production
8.3.2. The Corner Equilibria in Four Structures
8.3.3. General Equilibrium Structure of Transactions and Residual
Rights
8.4. The Distinction Between ex ante and ex post Production Functions
and
the New Classical Analysis of Demand and Supply
8.5. Economies of Division of Labor, Economies of the Firm, and Coase
Theorem
Theory of Entrepreneurial Discovery
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