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On the Samuelson-Etula Master Function and Marginal Productivity: some old and new critical remarks

Author

Listed:
  • Dvoskin, Ariel
  • Fratini, Saverio M.

Abstract

The paper addresses the ambiguity that surrounds the conception of capital and its role in neoclassical price-and-distribution theory. The difficulties encountered in the various attempts to define the marginal product either of capital or of a capital good are recalled and the conclusion is drawn that neither concept appears theoretically sound. This is combined with critical discussion of the recent attempt by Samuelson and Etula to determine income distribution by means of their ‘Master Function’ and its ‘non-neoclassical’ marginal products. Rather than the existence of a continuum of alternative technical possibilities, Samuelson and Etula assume the simultaneous coexistence of a discrete number of methods of production for the same commodity. Even though each technique employs the inputs in fixed proportions, the coexistence of various techniques permits the full employment of an arbitrarily given vector of input endowments. As is shown here, however, the coexistence of methods required for the differentiability of the Samuelson-Etula Master Function can take place, if capital goods are used in production, neither in the case with stationary relative prices nor in the non-stationary Arrow-Debreu framework.

Suggested Citation

  • Dvoskin, Ariel & Fratini, Saverio M., 2015. "On the Samuelson-Etula Master Function and Marginal Productivity: some old and new critical remarks," MPRA Paper 63415, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:63415
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    File URL: https://mpra.ub.uni-muenchen.de/63415/3/MPRA_paper_63415.pdf
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    References listed on IDEAS

    as
    1. Pasinetti, Luigi L, 1969. "Switches of Technique and the "Rate of Return" in Capital Theory," Economic Journal, Royal Economic Society, vol. 79(315), pages 508-531, September.
    2. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    3. Pierangelo Garegnani, 2007. "Samuelson's misses: A rejoinder," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(3), pages 573-585.
    4. Saverio M. Fratini, 2013. "Real W icksell Effect, Demand for Capital and Stability," Metroeconomica, Wiley Blackwell, vol. 64(2), pages 346-360, May.
    5. Hahn, F H, 1975. "Revival of Political Economy: The Wrong Issues and the Wrong Argument," The Economic Record, The Economic Society of Australia, vol. 51(135), pages 360-364, September.
    6. Paul A. Samuelson, 2007. "Classical and Neoclassical harmonies and dissonances," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(2), pages 243-271.
    7. Saverio M. Fratini, 2010. "Reswitching And Decreasing Demand For Capital," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 676-682, November.
    8. Tatsuo Hatta, 1976. "The Paradox in Capital Theory and Complementarity of Inputs," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 127-142.
    9. Fratini, Saverio M., 2012. "Malinvaud on Wicksell’s legacy to capital theory: some critical remarks," MPRA Paper 39574, University Library of Munich, Germany.
    10. Saverio M. Fratini, 2007. "Reswitching of Techniques in an Intertemporal Equilibrium Model with Overlapping Generations," Contributions to Political Economy, Oxford University Press, vol. 26(1), pages 43-59.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    capital – capital goods – marginal product of capital – Master Function - neoclassical theory of value and distribution –Samuelson;

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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