New growth models exhibit "scale effects," meaning that variations in the levels of key variables exert permanent influences on growth rates. Such predictions run counter to recent empirical evidence. In this paper we extend a general non-scale model to the open economy. With complete capital...

This paper explores the relationship between aggregate and relative congestion, returns to scale and economic growth. Aggregate congestion reduces the effective productivity of capital; relative congestion reduces the effective productivity of labour. Both forms of congestion adversely affect...