Book Description

General equilibrium analysis is shown to be a feasible tool for estimating the optimal level of public goods in a regional economy and the optimal allocation of public funds to obtain the desired level. This analysis provides a methodology for investigating the externalities associated with various forms of production. An interaction or trade mechanism is presented which will force a regional economy into equilibrium with the economy in which it is embedded: Relative prices will be identical in these economies for their common commodities. A technique is presented by which all public goods can be treated in a general equilibrium framework.