Post-Keynesian

This post is inspired by current events "It is not the primacy of economic motives in historical explanation that constitutes the decisive difference between Marxism and bourgeois thought, but the point of view of totality. The category of totality, the all-pervasive supremacy of the whole over the parts is the essence of the method which Marx took over from Hegel and brilliantly transformed into the foundations of a wholly new science. The capitalist separation of the producer from the...

Figure 1: Two Bifurcation Diagrams Horizontally Reflecting1.0 Introduction This post continues my investigation of structural economic dynamics. I am interested in how technological progress can change the analysis of the choice of technique. I have four normal forms for how switch points can appear on or disappear from the wage frontier, as a result of changes in coefficients of production. This post concentrates on what I call a reswitching bifurcation. Each bifurcation can be...

Nick Hanauer argues for some policies that postulate: Income distribution is not a matter of supply and demand or any other sort of economic natural laws. That a more egalitarian distribution of income leads to an increased demand and generalized shared prosperity. Tom Palley contrasts neoliberalism with an economic theory with an approach with another "theory of income distribution and its theory of aggregate employment determination". Elizabeth Bruenig contrasts liberalism with the the...

Figure 1: Wage Curves1.0 Introduction This post presents an example of the analysis of the choice of technique in competitive markets. The example is one with three techniques and two switch points. The wage curves for the Alpha and Beta techniques are tangent at one of the switch points. This is a fluke. And the wage curves for all three techniques all pass through that same switch point. This, too, is a fluke. I suppose that the example is one of reswitching and capital-reversing is...

1.0 Introduction Come October, as I understand it, the Review of Political Economy will publish, in hardcopy, my article The Choice of Technique with Multiple and Complex Interest Rates. I discuss in this post questions I do not understand. 2.0 Non-Standard Investments and Fixed Capital Consider a point-input, flow-output model. In the first year, unassisted labor produces a long-lived machine. In successive years, labor and a machine of a specific history are used to produce outputs of a...

I have put up a working paper, with the post title, on my Social Sciences Research Network (SSRN) site. Abstract: The choice of technique can be analyzed, in a circulating capital model of prices of production, by constructing the wage frontier. Switch points arise when more than one technique is cost-minimizing for a specified rate of profits. This article defines four normal forms for structural bifurcations, in which the number and sequence of switch points varies with a variation in...

Figure 1: Two Bifurcation Diagrams Horizontally Reflecting1.0 Introduction This post continues my investigation of structural economic dynamics. I am interested in how technological progress can change the analysis of the choice of technique. In this case, I explore how a decrease in a coefficient of production can cause a switch point to appear or disappear over the axis for the rate of profits. 2.0 Technology Consider the technology illustrated in Table 1. The managers of firms know...

Figure 1: Bifurcation Diagram1.0 Introduction This post continues a series investigating structural economic dynamics. I think most of those who understand prices of production - say, after working through Kurz and Salvadori (1995) - understand that technical innovation can change the appearance of the wage frontier. (The wage frontier is also called the wage-rate of profits frontier and the factor-price frontier.) Changes in coefficients of production can create or destroy a reswitching...

My article with the post title is now available on the website for the Review of Political Economy. It will be, I gather, in the October 2017 hardcopy issue. The abstract follows. Abstract: This article clarifies the relations between internal rates of return (IRR), net present value (NPV), and the analysis of the choice of technique in models of production analyzed during the Cambridge capital controversy. Multiple and possibly complex roots of polynomial equations defining the IRR are...

Figure 1: Bifurcation Diagram1.0 Introduction In a series of posts, I have been exploring structural economic dynamics. Innovation reduces coefficients of production. Such reductions can vary the number and sequence of switch points on the wage frontier. I call such a variation a bifurcation. And I think such bifurcations, at least if only one coefficient decreases, fall into a small number of normal forms. One possibility is that a decrease in a coefficient of production results in a...