GeneRal EQuilibrium Economics: Allowing for Imperfect Competition

The author argues that the only possible microeconomic theory is the one based on the general equilibrium model. After a historical account of efforts to incorporate agents with market power into the general equilibrium model, he discusses the problems faced in this area and possible avenues for future research. He sees, as one of the major stumbling blocks to this endeavour, the difficulties in incorporating production and particularly increasing returns to scale into the model.