Robert Vienneau: Thoughts Economics

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...

A Spell for Chameleon, the first book of the Xanth series, shows that Piers Anthony is a neoliberal1. Magicians are important characters in Xanth, and A Spell introduces us to at least two, Humphrey2 and Evil Magician Trent. We find that "Evil" is just what Trent is called. We are not supposed to regard him as such. And he bases his life entirely on market transactions, even though the setting is a feudal society. Everything is an agreement to a contract, or not, for mutual advantage. An...

Figure 1: Bifurcation Diagram1.0 Introduction This post continues my exploration of the variation in the number and "perversity" of switch points in a model of prices of production. This post presents a case in which one switch point replaces two switch points on the wage frontier. 2.0 Technology The example in this post is one of an economy in which four commodities can be produced. These commodities are called iron, steel, copper, and corn. The managers of firms know (Table 1) of one...

Figure 1: Bifurcation Diagram1.0 Introduction I have been exploring the variation in the number and "perversity" of switch points in a model of prices of production. I conjecture that generic changes in the number of switch points with variations in model parameters can be classified into a few types of bifurcations. (This conjecture needs a more precise statement.) This post fills a lacuna in this conjecture. I give an example of a case that I have not previously illustrated. 2.0...