A study of scale and growth
Minimum
Viable Scale
Extinction and Escape under Increasing Returns
An economy may have enough productive capacity to keep replacing what wears out, yet still fail to offer the returns needed to support investment. And even when expansion is possible, it may not be the best path from every starting point. These are three different questions.
Overview
Survival is not the same as growth.
In Minimum Viable Scale, coauthored with President Javier Milei, I study them in a mathematical growth model where capital and labor reinforce each other and available labor is limited. Increasing returns mean that expanding both inputs together can raise output more than proportionally. The paper separates the scale needed to maintain capital, the conditions needed to meet required returns and the initial conditions from which growth is optimal.
The paper derives exact scale boundaries for a family of production technologies and examines how reductions in productivity move those boundaries. It develops Bellman barriers and finite mathematical certificates to compare future paths.
The original figure
What the certificate establishes
Scroll horizontally to read the complete figure.
Three distinct questions
Can capital be maintained?
The physical floor is the least available labor capacity at which some capital stock can be maintained against depreciation. Below it, the economy cannot sustain its capital.
Can the required return be reached?
The marginal-return floor is the least labor capacity at which the return required by discounting and depreciation is attainable. This is necessary, but not sufficient, for an interior stationary allocation.
Which path is worth choosing?
Global selection asks which initial capital stocks lead the planner to choose a higher-scale path over stagnation or exit. Comparing those future paths requires more than checking a stationary condition.
The method
A proof that can be checked
We compare complete future paths, rather than judge growth from a single point in time. Bellman barriers are mathematical bounds that make those comparisons possible. Finite certificates turn a conclusion about a whole path into explicit inequalities that a standalone verifier can check. The paper derives exact static scale boundaries for its production family and certifies high selection over specified regions.
These are stylized proof-of-concept economies, not calibrations of particular countries. The paper leaves an explicitly unclassified band and sets out further work on decentralized economies and stochastic shocks.
The research programme
From Davos to Minimum Viable Scale.
The research developed through distinct public manuscripts. Each retains its own title, date and scope.
When regulation kills growth
Summary for Davos · 18 pages
The January summary studies increasing returns, minimum viable labor scale and stationary outcomes. It remains a distinct manuscript from the July paper.
Minimum Viable Scale
Extinction and Escape under Increasing Returns · 30 pages
The July working paper separates physical viability, marginal-return feasibility and global selection. Our public announcement describes it as a version of the work presented at Davos.
On 21 January 2026, President Milei directed the Davos audience to our research collaboration. My publication that day links the January summary; the July working paper followed under its own title.
Citation and original sources
Milei, Javier, and Demian Reidel. Minimum Viable Scale: Extinction and Escape under Increasing Returns. Working paper, July 2026.
Correspondence
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