Economics Dictionary of ArgumentsHome
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| Method: a method is a procedure agreed on by participants of a discussion or research project. In the case of violations of a method, the comparability of the results is in particular questioned, since these no longer come from a set with uniformly defined properties of the elements._____________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. | |||
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David Gawen Champernowne on Method - Dictionary of Arguments
Harcourt I 32 Method/measurements/continuum/Champernowne/Harcourt: The chain index method(1) is not, (…) confined to the case of discrete technologies. Champernowne gives an example containing a continuous spectrum of techniques and shows that we may always value consecutive techniques at common rates of profits and real-wage rates, even if each is the only technique most profitable at its r and w. Harcourt I 33 When he examines accumulation he uses current factor prices for valuation purposes at any moment of time and he argues that we may make the errors as small as we like by decreasing the size of the links in the chain. When he compares stationary states, in the continuous case he uses lower n and higher ws for linking purposes: see Champernowne [1953- 4(1)], p. 115. Harcourt: Finally, (…) that the chain index method depends upon knowing from elsewhere and already, the rate of profits or wage rate and calculating a price of output which corresponds to the unit cost of producing it. Measurement: Capital is therefore not measured in a unit which is independent of distribution and prices. Production function: A verbal explanation of the properties of the chain index capital production function is as follows: consider, say, equipments 1 and 2 which we know are equi-most profitable at the rate of profits of r12 (=20 per cent). Equipment 2 allows a higher output per head (3 units) than equipment 1 (2 ½ units). Let island A employ quantities 5 of 1 and 7 of 2, measured in terms of the chain index; island B uses 5 +1 ( = 6) of 1 and 7 — 1 (= 6) of 2 (constant returns to scale allow divisibility of this nature). Costs: Then the costs at wage rate w12 (= 1.25), and rate of profits r12 (= 20 per cent), of the total sets of equipment are the same on both islands, namely, 12 chain index units each, so that the interest bills (or normal profits payments) are the same on both islands also. Harcourt I 34 Labour/wages: Partially differentiating the branches with respect to labour, for example, does indeed give marginal products of labour equal to the appropriate equilibrium wage rates. The values of the coefficients of the capital terms are, of course, affected by the base from which the chain index starts. Equilibrium/factor prices: If, however, real capital were used in all branches, it would not be true in general that the respective capital and labour coefficients equalled the equilibrium factor prices. 1. Champernowne, D. G. [1953-4] 'The Production Function and the Theory of Capital: A Comment', Review of Economic Studies, xxi, pp. 112-35._____________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. |
Champernowne I David Gawen Champernowne Uncertainty and estimation in economics (Mathematical economics texts) Edinburgh 1969 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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