Quesnay and Leontief on Capital and Income
AbstractI analyze Quesnay's explanation of the "Tableau Economique" of 1766 in order to show that he made a clear distinction between capital and income. In holding this distinction, Quesnay rejected the nowadays currently accepted views that the full value of the national output is equal to aggregate income and that the value of national output is equal to the payments to labor, capital and land. I analyze the foundation upon which Quesnay established the distinction and show that it is sound. In so doing, I also discuss the validity of Phillips' standard interpretation of the "Tableau" in terms of input-output tables. I show that this interpretation distorts Quesnay so seriously that it attributes to him the rejection of the distinction of capital and income. On the theoretical basis provided by the analysis of Quesnay's distinction, I contend that Leontief's input-output tables do not show that the aggegate value of output is equal to aggregate income, but the contrary, that is, that Quesnay's distinction was right.
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Bibliographic InfoPaper provided by Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) in its series BILTOKI with number 2003-08.
Date of creation: Mar 2002
Date of revision:
Postal: Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
This paper has been announced in the following NEP Reports:
- NEP-HPE-2003-07-10 (History & Philosophy of Economics)
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