Full Industry Equilibrium
A Theory of the Industrial Long Run

This original book develops a systematic zero-net-profit comparative statics theory to shed new light on the microeconomics of industry equilibrium.

Arrigo Opocher (Author), Ian Steedman (Author)

9781107097797, Cambridge University Press

Hardback, published 28 May 2015

232 pages, 26 b/w illus. 12 tables
23.6 x 15.7 x 2 cm, 0.5 kg

'A new wave of debates of high theory related to long-period industry equilibrium analysis that takes seriously the inter-industry connections is coming. The trigger is this fascinating book by Arrigo Opocher and Ian Steedman. The authors have a deep knowledge of the debates in the 1960s and 1970s, but in this book they go far beyond. It will be an essential reading for all microeconomists and industrial economists in the decades to come.' Neri Salvadori, University of Pisa

This highly original book develops a systematic zero-net-profit comparative statics theory of the firm that challenges many widely held views in microeconomics. It builds a bridge between the marginalist long-run theory of the firm and Sraffian theory to create a unified theoretical framework that explains how firms react to exogenous shocks resulting in new equilibrium positions of the whole economy. The central message of the book is that too often economists expect more from the microeconomic laws of input demand and output supply than they can really give. The authors show that the zero-net-profit condition requires a more articulated analysis that sometimes yields qualitative results contrary to those of familiar economic laws. Written for academic researchers and graduate students, the book will be of particular interest to those working on the microeconomics of industry equilibrium, comparative statics and Sraffian economics.

Preface
Introduction
1. Taking seriously the tendency to zero net profits
2. An isolated industry
3. Multiproduct firms
4. Interdependent industries
5. Industry-level input use. Some aftershocks from capital theory
6. The 'autonomous' components of input prices
7. The effects of taxation
8. Productivity increase
9. Full industry equilibrium in retrospect
10. Conclusion
References
Index.

Subject Areas: Microeconomics [KCC], Economic theory & philosophy [KCA]