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Journal Articles International Economic Review Year : 1997

Externalities, internalization and fluctuations

Hervé Crès
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Mich Tvede
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Abstract

In this paper we introduce consumption externalities as developed by Arrow in overlapping-generations economies. We show how the internalization of externalities-through exchanges at markets for externalities-may give rise to new phenomena such as altered stability properties and fluctuations, even though it restores optimality.
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hal-03417501 , version 1 (05-11-2021)

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Hervé Crès, Christian Ghiglino, Mich Tvede. Externalities, internalization and fluctuations. International Economic Review, 1997, 38 (2), pp.465 - 477. ⟨hal-03417501⟩

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