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Pecuniary External Economies, Economies of Scale and Increasing Returns: A Note of Dissent

Grieve, R.H. (2010) Pecuniary External Economies, Economies of Scale and Increasing Returns: A Note of Dissent. Review of Political Economy, 22 (1). pp. 127-140. ISSN 0953-8259

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Abstract

In a recent paper Chandra & Sandilands (2006) put forward three contentious propositions concerning the 'mechanics' of the process of economic growth: these propositions are to the effect (1) that 'pecuniary external economies' should not be considered instances of market failure; (2) that economies of scale are of little importance in accounting for increasing returns, increasing returns being, it is alleged, attributable to other factors such as external economies or 'industrial differentiation'; and (3) that increasing returns are not 'sector specific', implying that particular sectors should not therefore be singled out for special promotion. This note investigates the arguments advanced by Chandra & Sandilands in support of these propositions, and finds that no convincing case is made for any of them. In particular, we stress the invalidity of Chandra & Sandilands' contention that increasing returns are largely independent of economies of scale.

Item type: Article
ID code: 28135
Keywords: Political science (General), Economic Theory, Political Science and International Relations, Economics, Econometrics and Finance (miscellaneous)
Subjects: Political Science > Political science (General)
Social Sciences > Economic Theory
Department: Strathclyde Business School > Economics
Related URLs:
Depositing user: Miss Jenna Wright
Date Deposited: 14 Oct 2010 09:51
Last modified: 27 Mar 2014 09:01
URI: http://strathprints.strath.ac.uk/id/eprint/28135

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