N: the state should levy higher taxes economic activities with diminishing returns (raw materials) and deduct or pay bonuses (subsidies) for economic activities with increasing returns. This was the strategy that has created a middle-income countries since Henry VII ascended the throne of the impoverished kingdom of England and established rates for the export of raw wool to subsidize the manufacture n cloth, and is also the logical consequence of the New Trade Theory by Paul Krugman that appeared in the 1980's, although Ely colleagues refrain from dedat that time the U.S.) are very real, as the process retains its dynamic. In Europe, tariffs and other barriers were reduced slowly and achieved integration. The European Union continued this practice until gradual integration of Spain in 1986, ensuring the salvation of the major English industries.
Scale is important, and the expression of Schumpeter "historical increasing returns" usefully describes the combination of technological change and increasing returns that is in the namp; oacute n wrong. The best thing to happen in the short term is that it stops.
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