I don't know if this ever was received. [was: FW: [PEN-L:20628] Re: Re: Enron]
>Wasn't Senator Douglas the Douglas in the Cobb-Douglas production function?< yup. He was a New Deal liberal (warts and all) who was very principled. According to Martin Bronfenbrenner (INCOME DISTRIBUTION THEORY, 1971, p. 387): The C-D production function "developed in the 1920's from observations by Paul H. Douglas on time series of index numbers for the United States and the state of Massachusetts. These indexes rose in logarithmic straight-line patterns, indicating constant long-term growth rates. The 'capital' series rose most rapidly and the 'labor' series more slowly. [sounds like a rising OCC!] The 'product' series followed labor more closely than capital, whether the latter was defined to include or exclude working capital. "Searching for a mathematical formula to summarize these relations, one that might also combine constant returns to scale (linear homogeneity) with diminishing returns to individual inputs, Douglas consulted Charles W. Cobb, a professional mathematician..." BTW, this is a classic example of where inductive reasoning can go wrong. People -- such as the post-autistic economists -- criticize the neoclassicals for overdoing deductive reasoning (as they indeed do), but inductive reasoning can be bogus, too. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
