Hi Fred, > I am discussing marginal productivity theory that I find in the textbooks > and the literature. Your interpretation seems to be something different > from that. Who would you say has presented an interpretation of marginal > productivity theory that is the most similar to yours? Which micro > textbook would you recommend on marginal productivity theory?
Quick note on this: This is precisely the reason why I began by asking you what you meant by MPT. I read your answer as saying that it was about r_K (the return on constant capital) being quantitatively determined by MP_K. (It's like with Marxism: Ask 10 marxists what "Marxism" means, and you'll get 100 different answers, 80 of them from me alone.) I don't think anybody has abandoned the general idea that r_X is determined by MP_X. If it seems so, it may be because the idea has been incorporated into more general treatments and appears under all sorts of names. I think it is embedded in most of what PEN-L people would call "neoclassical economics." In intro textbooks, models are presented with didactic intent. To fit the constraints, authors must make idiosyncratic choices about what to include and what to leave out. These treatments are not very rigorous. If you are radically and adamantly against the idea that the return rate on anything is determined by its marginal productivity, then going against simplified and rather idiosyncratic versions of the story doesn't do much damage. The best treatments, IMO, are those in which the material is thoughtfully organized, going step by step from the abstract to the concrete. IMO, Varian's and Mas-Collel's advanced textbooks are terrible on this. They cover a lot of stuff, but do not show well how the stuff connects. Deficient in many ways, but I think Dixit's Optimization in Economic Theory stands out, because it's short and readable. It weakens as it gets to the last few chapters, but one does get a sense of how the edifice can be built up. For a more comprehensive and rigorous treatment, I'd recommend Intriligator's book, Mathematical Optimization and Economic Theory. It's aged, but not badly. Silberberg's Structure of Economics is a bit too verbose for my state, but it emphasizes the intuition. My personal favorite for its thoughtful organization, clarity, and economy of presentation is the Kamien and Schwartz's book, Dynamic Optimization. In the Kamien and Schwartz, the basic static case is not even presented formally, but it is easy to see it as a special "degenerate" case of the more general (dynamic) model. The math required is contained in very neat appendices. The book is expensive (out of print), but people find pdf versions on the web. If a big concern of yours is whether the MPT (as you define it) can be a general equilibrium theory of distribution, then check out a book on general equilibrium. You'll see that the MPT is there. I'd recommend Ross' General Equilibrium Theory. Best, Julio _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
