Article Abstract:
A new model of specialization can be applied to issues associated with the organization of exchange and production. A complete division of labor is evident in the general-equilibrium market structure if a high level of returns to specialization and transaction efficiency occurs. A partial division of labor occurs if intermediate levels of returns to specialization and transaction efficiency are reached, and autarky occurs if returns are low. Inside money or the commodity with the highest transaction efficiency is the medium of exchange when a complete division of labor occurs.
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Article Abstract:
The role of agents' limited capacities for acquiring and communicating organizational information in providing a rationale for hierarchies was examined. The study was designed to analyze the time required to evaluate and relay information on investment projects in various organizational forms. Results show that the relative advantage of the organizational hierarchy in discarding projects with negative expected profits becomes more important when an agent's screening rule changes to increase the probability of approving a project with any given level of profit.
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Article Abstract:
Economists who ignore the significance of household production may obtain an upwardly biased measure of economic growth. Household production shifts to market production as economic growth occurs. A model of household production shows that the household sector's relative size decreased between 1930 and 1985. Household output represented 28% of market output in 1985, compared to 73% in 1930. Compositional changes in the labor force and the decrease in time that women spent doing housework contributed to this decline.
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