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@MaxJerneck @HectorPollitt @YannisDafermos @M_Nikolaidi @CambridgeEcon It was done for computational convenience, not because it more accurately describes the economy to leave them out. Arthur, W. Brian. 1990. "Positive Feedbacks in the Economy." In Scientific American. February. pp. 92-99.
@MaxJerneck @HectorPollitt @YannisDafermos @M_Nikolaidi @CambridgeEcon Here's a great example of implications in the climate context. This classic study included learning effects and showed that the model resulted in two clumps of outcomes that were within 1% in terms of costs but vastly different in emissions.
@MaxJerneck @HectorPollitt @YannisDafermos @M_Nikolaidi @CambridgeEcon Gritsevskyi, Andrii, and Nebojsa Nakicenovic. 2000. "Modeling uncertainty of induced technological change." Energy Policy. vol. 28, no. 13. November. pp. 907-921. [sciencedirect.com/science/articl…]
@MaxJerneck @HectorPollitt @YannisDafermos @M_Nikolaidi @CambridgeEcon Have you heard of the Cobb Douglas production function? That embodies constant returns to scale. It's the default assumption in most simple modeling (and a lot of more complicated modeling also).
