Mathematical Vindication of Ricardo on Machinery
AbstractRicardo is shown to be right that machinery can hurt wages and reduce output. A dramatic robot example reveals Knut Wicksell's erro r in believing that Pareto optimality calls for no drop in total outp ut from a viable invention. Under Ricardo's axiom that labor supply a djusts to keep wages at the subsistence level, he can correctly deduc e on a market-clearing basis a rise in his net product (rent plus int erest), while the greater drop in population and total wages results in a reduction in his gross product (rent plus interest plus wages). Copyright 1988 by University of Chicago Press.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 96 (1988)
Issue (Month): 2 (April)
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- Meacci, Ferdinando, 2008. "Machinery Question," MPRA Paper 11696, University Library of Munich, Germany.
- Thomas M. Humphrey, 2004. "Ricardo versus Wicksell on job losses and technological change," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 5-24.
- Joao Ricardo Faria & Miguel Leon-Ledesma & Adolfo Sachsida, 2006. "Population and income: Is there a puzzle?," Journal of Development Studies, Taylor & Francis Journals, vol. 42(6), pages 909-917.
- Takashi Uchiyama, 2000. "Ricardo on machinery: a dynamic analysis," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 208-227.
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