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This is a long comment that is too long for the comment box. In fact, many research projects in US are secretive, especially the ones related to military. At the same time, much, much more research projects in China are secretive, including some agricultural ones, which are not military-related but considered as national security-related by Chinese ...


4

Provided that increasing returns to scale apply over the whole production function of the company it is likely that it would become natural monopoly. For example, Mankiw in Principles of Economics (pp 292) in some passages even defines monopolies in relation to their cost function: When a firm’s average-total-cost curve continually declines, the firm has ...


3

Besides the great answers already given, adding my two cents: A firm ends up being a sole player in the sector when market entry for others is restricted, which may not be guaranteed by IRTS or even continual economies of scale. First, it is important to realize that, contrary to our first naive intuition, IRTS does not imply economies if scale. See this for ...


3

It can be shown that a firm with increasing returns to scale (IRTS) and no market power makes a negative profit (and may not be observed at all, in the long run). Conclusion: either subsidies, or market power is necessary for a firm with global IRTS to be sustainable. With usual notations, the claim follows from the first order condition for an (inner) ...


3

Your assumption is correct. Value added is Gross Output-intermediate consumption(inputs). value-added approach is a simple measure that ignores the difficulties of dealing with inter-industry and intra-industry flows of goods and services. Intermediate inputs are simply excluded here. The value-added approach provides a simple link of industry-level MFP ...


2

tl;dr: R&D spending cannot stimulate economy during just by increasing long-run aggregate supply because recessions are fluctuations around the long-run aggregate supply and not necessary affected by the long-run aggregate supply. A in which spending on R&D in principle could be more effective in fighting recessions than other spending. The ...


2

I found this excellent Economic Letter from the Federal Reserve Bank of San Francisco that speaks to this observation. It is from Carl R. Walsh (july 16,2004) (https://www.frbsf.org/economic-research/publications/economic-letter/2004/july/the-productivity-and-jobs-connection-the-long-and-the-short-run-of-it/ ) In this letter he notes that, newspaper ...


1

There is not necessarily any contradiction. Full employment does not mean every single person in economy is employed. Full employment is (Worswick; 1987): Full employment does not mean zero unemployment. There can be dislocations where large numbers of workers are displaced from their present employment, and time is needed before new workplaces can be ...


1

Capital accumulation would still appear as investment GDP. Its possible theres other applications for this spending that would result in higher gdp. For example, GDP spiked in ww2 because military spending happens to be very efficient at inflating GDP. So it is intuitively plausible that potential output is hidden by rising investment- the closest equivalent ...


1

I agree with @1muflon1's comment that this is quite broad, because AGI can be defined in many different ways. For instance, do we consider simple learning tasks as AGI or metacognition? This is a brief survey of AGI startups, but another point to keep in mind is that few startups/firms are actually gunning for AGI because we generally have problems in other, ...


1

this is attributed to better computer-production technology in the US. But what is that technology? Is it better physical capital, in the form of computer-building machines? Is it better human capital? In a sense yes. For example, typical Cobb-Douglas function with capital labor and human capital would look like this: $$Y = A K^{\alpha} L^{\beta} H^{1-\...


1

The logic you presented is known as technological unemployment. It is true that due to technological improvements, you would need less people to do the same amount of work. But along with technological progress, you would need more highly skilled workers to operate these high-tech machinery. What Mankiw meant (at least according to me) is that the demand ...


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