Endogenous Specialisation and Endogenous Principal-agent Relationship

The paper develops a general equilibrium model with endogenous principal-agent relationship within a framework of consumer-producer, economies of specialisation, and transaction costs. It is shown that if transaction efficiency is low, then autarky is chosen as the general equilibrium where no market and principal-agent relationship exists. As transaction efficiency is improved, the equilibrium level of division of labour increases, comparative advantage between ex ante identical individuals emerges from the division of labour, and the number of principal-agent relationships increases. The following features of the model distinguish it from other principal-agent models in the literature. The principal-agent relationships are not only endogenous, but also reciprocal between different specialists. In a general equilibrium environment, choice between pure pricing and contingent pricing is endogenised. In the paper, the implications of endogenous transaction costs caused by moral hazard for the equilibrium extent of the market and related degrees of market integration, production concentration, trade dependence, diversity of economic structure, and productivity are explored. The model predicts two interesting phenomena: a man might work harder for the market with moral hazard than working for himself in the absence of moral hazard; a market with moral hazard might be Pareto superior to autarky with no moral hazard.     

A NEW THEORY OF DEMAND AND SUPPLY AND EMERGENCE OF INTERNATIONAL TRADE FROM DOMESTIC TRADE

Abstract. In the paper a fixed learning cost is introduced into a framework with consumer-producers and transaction costs. The fixed learning cost yields a rate of return on the investment in individual specific learning and training which is increasing in its rate of utilization. Division of labor can avoid duplicated learning costs and generate economies of specialized learning. The tradeoff between economies of specialization and transaction costs can be used to explain concurrent increases in the extent of the market, aggregate demand, productivity, trade dependence, the degree of market integration, the degree of production concentration, diversity of economic structure, variety of different professions, each person's level of specialization, and the extent of endogenous comparative advantage and the emergence of international trade from domestic trade. This model explains demand and supply as two sides of the level of division of labor which is determined by a transaction cost coefficient. Hence, the demand law may not hold even for normal goods owing to complicated interdependencies between the level of specialization and demand and between the level of specialization and prices of traded goods. The extended version of this model with the CES function is used to endogenize variety of consumption in addition to the endogenization of individuals'level of specialization.     

An Inframarginal Analysis of the Ricardian Model

This paper shows that a 2 × 2 Ricardian model has a unique general equilibrium, and the comparative statics of the equilibrium involve discontinuous jumps. If partial division of labor occurs in equilibrium, the country producing both goods would impose a tariff, whereas the country producing a single good would prefer unilateral free trade. If complete division of labor occurs in equilibrium, both countries would negotiate 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.     

基于适宜度的我国林业加工企业信息化综合评价模型的构建

随着信息技术的不断发展,企业信息化已成为企业发展的关键性因素.如何进行信息化,企业的信息化水平如何评价已经越来越受到人们的重视.本文通过对企业适宜度指标和我国林业加工企业信息化能力和水平进行科学合理的评价和研究,建立适宜度综合评价模型.     

An Equilibrium Model Endogenizing the Emergence of a Dual Structure between the Urban and Rural Sectors

This paper presents a general equilibrium model which formalizes the trade-off between economies of specialization and transaction costs. The comparative statics, based on corner solutions, indicate that the general equilibrium will shift between several market structures as transaction efficiency is improved. Introducing a differential in transaction efficiency between the agricultural and manufacturing sectors, we derive the emergence of a city from the evolution of the division of labor, which is driven by improvements in transaction efficiency. The division of labor is necessary but not sufficient for the emergence of cities. A sufficiently high transaction efficiency will make a city emerge from a high level of division of labor between specialized manufacturers.     

The Division of Labor,Investment and Capital

A dynamic general equilibrium model based on corner solutions is used to formalize the classical theory of investment and capital which considers investment to be a vehicle for developing a high level of division of labor in roundabout productive activities. If it takes time for a specialist producer of tractors to learn the right method to produce commercially viable tractors, specialization in producing tractors is infeasible in the absence of investment in terms of consumption goods which are consumed by the specialist producer of tractors before he can sell tractors. If specialized learning by doing can speed up accumulation of professional knowledge so that roundabout productive machines become cheap, such investment for increasing the level of division of labor in roundabout productive activities will speed up economic growth. Because of the trade-off between economies of specialized learning by doing and transaction costs, the model can be used to investigate the effects of a change in the transaction cost coefficient, which can be affected by policy, the legal system and urbanization, on the evolution of the division of labor, on real interest rates and on the saving rate.     

China's entry to the WTO

The paper predicts two possible outcomes of China's accession to the WTO. If this stimulates the initiation of a real constitutional negotiation among different interest groups in China, then China's WTO membership will benefit China as a whole in a profound way. If the ruling party can successfully block the initiation of the constitutional negotiation and carry out a new dual track approach in implementing WTO game rules, then China as a whole may suffer from its WTO membership. The dual track approach may exacerbate inefficient inequality of income distribution, further institutionalise state opportunism and corruption, lower moral standards, and increase social tension that destabilizes China's political system.     

经济改革和宪政转轨

该文研究经济改革和宪政转轨之间的关系,论证国家之间和国家内部不同政治力量间的竞争是宪政转轨的推动力量.通过对俄罗斯和中国的例证,该文分析了两种转轨模式下的特征和问题.结论是,在政治垄断下的经济转轨将被国家机会主义所挟持.经济转轨双轨制产生了宪政转轨的非常高的长期代价,大大超过它赎买既得利益平滑转型的短期好处.经济转轨是后社会主义国家的制度与WTO规则下的全球经济趋同的过程,而不是创造一个本质上不同的制度的创新过程.     

An extended Heckscher-Ohlin model with transaction costs and technological comparative advantage

Summary. This paper introduces technological differences and transaction costs into the Heckscher-Ohlin (HO) model and examines the HO theorem, factor price equalization theorem, the Stolper-Samuelson theorem and the Rybczynski theorem. It shows that the HO theorem can be refined, and that the factor price equalisation theorem, the Stolper-Samuelson Theorem and the Rybczynski theorem do not always hold. It also shows that transaction costs play an important role in determining the equilibrium trade pattern.Received: 26 February 2001, Revised: 27 May 2003, JEL Classification Numbers: F10, F11. Correspondence to: Wenli ChengWe are grateful for comments from the anonymous referee, Hugo Sonnenschein, Guangzhen Sun and participants of the seminar on this paper at University of Washington.     

Agglomeration Economies,Division of Labour and the Urban Land‐rent Escalation: A General Equilibrium Analysis of Urbanisation

A general equilibrium model with increasing return to labour specialisation and economies of transaction agglomeration is developed to address the residential land‐rent escalation associated with the urbanisation process, which is in turn endogenised as a result of the evolution of the division of labour. The interplay among the geographical pattern of transactions, trading efficiency and the network size of the division of labour plays a crucial role in our story of urbanisation. We show that: as transaction conditions are improved, the equilibrium level of division of labour and individuals specialisation levels increase; the urban land‐rent increases absolutely as well as relative to that in the rural area, the relative per capita lot size of residence in the urban and rural areas decreases; the diversity of occupations in the urban area and the population share of urban residents increase; and the productivity of all goods and per capital real income increase.