I tried to deal with the problem that increasing returns posed for the neo-classical vision of perfect competition. Krugman's review seemsed somewohat oversimplified.
Almost 10 years ago, I posted this to the post-keynsian list regarding Krugman on increasing returns. What Krugman failed to mention was that Marshall was frightened of the implications of increasing returns and did nothing to work out its implications because it interfered with the pretty models that he so loved. see Bharadwaj, Krishna. 1972. "Marshall on Pigou's Wealth and Welfare." Economica, n.s. 39: 153 (February): pp. 32-46. -- Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901
