Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Production function: A production function represents the relationship between input factors (labor, capital, etc.) and output in an economy or firm. It shows how efficiently resources are converted into goods or services, often expressed as Q = f(L, K, ...). It helps analyze productivity, efficiency, and returns to scale in production processes. See also Aggregate production function, Production, Capital, Capital structure, Cobb-Douglas production function, CES Production function._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Joan Robinson on Production Function - Dictionary of Arguments
Harcourt I 4 Production Function/Robinson/Harcourt: In constructing Joan Robinson's version(1) of the production function, we introduce and define the major tool of these and the subsequent analyses, namely, the wage-rate-rate-of-profits trade-off relationship or factor-price frontier. >Factors of production. Wage/profit/factor price/Neo-neoclassicals: The neo-neoclassicals no doubt use the latter term because it expresses their belief that the wage rate and the rate of profits are factor prices on an equal footing. This relationship shows the maximum rate of profits which, under competitive conditions and given the value of the real-wage rate, a given technique allows to be paid. (Alternatively, from an analytical point of view, it shows the maximum real-wage rate which, given the same competitive conditions and the value of the rate of profits, a given technique allows to be paid.) >Factor price, >Factor price frontier. Harcourt I 23 Production Function/Robinson/Harcourt: (…) we (…) derive Joan Robinson's version of the production function as presented in Robinson [1953-4](1), using,in order to illustrate it, a simple arithmetic example of Champernowne's from Champernowne [1953-4](2). >Equilibrium/Robinson, >Labour time/Robinson, >Capital/Robinson, >D.G. Champernowne. We shall be doing aggregative analysis and must be thought of as comparing, one with another, different possible stationary states Harcourt I 24 - Solow's isolated islands of stationary equilibrium, each a point on the pseudo-production function, see Solow [1962a(3), 1963b(4)]. >Equilibrium, >Pseudo-production function. The net products of these islands consist of quantities of an all-purpose consumption good; capital goods are already created and last forever, the rates of profits and real wages have long been ruling and are expected confidently to continue to do so in the future, and one uniform technique (or two equi-profitable ones) rule. We also assume - quite vitally - constant returns to scale in the sense of the possibility of complete divisibility (though often no substitutability) so that labour-equipment ratios may be repeated at any scale of operation. It follows from our definition of equilibrium that (1.1) K = wLg(1 + r)t = Q-wLc / r where K = capital measured in terms of the consumption commodity w = wage rate in terms of the consumption commodity r = rate of profits (and interest) Lg = input, t periods ago, of labour required to produce a unit of equipment, where t is the gestation period of investment* and Q = output of consumption good when Lc men work with a unit of equipment (which is assumed to last forever) capital in terms of labour time (KL) therefore is (1.2) KL = K/w = Lg(1 + r)t Given Lg KL is seen to be a simple increasing function of r. All known techniques - sets of equipment producing final outputs of the consumption good - now may be ordered according to the sizes of their outputs per head of a constant, consumption-good-trade labour force.* If each is 'costed up' at various rates of interest and expressed as amounts of KL per head, we may derive the real-factor ratio - the set of equilibrium relationships between output per head, capital in terms of labour time (or real capital, as Joan Robinson dubs it) and all conceivable wage rates. Corresponding to each equipment will be the relationship (1.3) Q = wLc + rwLg(1 + r)t Harcourt I 25 (1.4) W = Q / Lc + rLg (1 + r)t For any given value of w <= g/Lc = wmax, which prevails when r = 0 and is the consumption good output per head of each technique), we may find the highest value of r associated with this value of w and this equipment. This reflects the view that if the equipment were viable at a given wage rate, so that it was in fact in use on the relevant island, the forces of competition would ensure that the rate of profits which exhausted the product would in fact be paid. Aggregate production function/Robinson/Harcourt: The costing and valuation process is repeated for all equipments, ws and rs and then the relationship between output per head and real capital is plotted to give Joan Robinson's version of the aggregate production function - her pseudo-production function - which has (…) a rather bizarre appearance relative to the smooth curves of the textbooks. >Aggregate production function/Robinson, >Equilibrium/Robinson. * The list is known in the trade as the 'book of blue-prints' 1. Robinson, Joan (1953-4). 'The Production Function and the Theory of Capital', Review of Economic Studies, xxi. 2. Champernowne, D.G. [1953-4] 'The Production Function and the Theory of Capital: A Comment', Review of Economic Studies, xxi, pp. 112-35 3. Solow, R. M. [1962a] 'Substitution and Fixed Proportions in the Theory of Capital', Review of Economic Studies, xxrx, pp. 207-18. 4. Solow, R. M. [1963b] 'Heterogeneous Capital and Smooth Production Functions: An Experimental Study', Econometrica, xxxi, pp. 623-45._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconRobin I James A. Robinson James A. Acemoglu Why nations fail. The origins of power, prosperity, and poverty New York 2012 Robinson I Jan Robinson An Essay on Marxian Economics London 1947 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
||
> Counter arguments against Robinson
> Counter arguments in relation to Production Function
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
