Economics Dictionary of ArgumentsHome
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| Neoclassical economics: Neoclassical economics is a school of economic thought that emerged in the late 19th century. It is based on the principles of rational choice, marginalism, and general equilibrium. Neoclassical economists believe that markets are the most efficient way to allocate resources and that government intervention should be minimized. See also Efficiency, Markets, Equilibrium, Interventions, Liberalism, Rational Choice._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Christopher J. Bliss on Neoclassical Economics - Dictionary of Arguments
Harcourt I 74 Neoclassical economics/models/idealization/Bliss/Harcourt: Neoclassical vintage models appeared to have reached their finest hour in Bliss's recent paper, 'On Putty Clay' (Bliss [1968a](1)), only for Bliss to be capped by Bardhan [1969](2) who claims to be able to do all that Bliss can do - and more (if not better). Bliss's paper is a rigorous examination of the earlier models of Salter [1960(3), 1965(4)] and Johansen [1959](5). It starts by emphasizing that there may not be a unique choice of technique under profit-maximizing assumptions, once very simple factor price expectations are departed from and the expected economic lives of the 'best-practice' techniques differ. Harcourt: Bliss's point may perhaps be most simply put as follows. Suppose that the elasticity of substitution of the curve (…) is very great and suppose further that businessmen have the simple but plausible expectations concerning the future course of their product wages (…). Then, (…) we get a positive association between expected longevity and investment-intensity. Substitution: If the possibilities of substitution of investment for labour are very great, small (proportionate) increases in investment expenditure will lead to large savings in labour and so to considerable (proportionate) increases in expected economic lives. BardhanVsBliss: Bardhan [1969](2) shows that Bliss's result holds only if the elasticity of substitution of the ex ante production function is greater than unity. >Elasticity. Harcourt I 76 HarcourtVsBardhan: This cheers up Bardhan, though we may certainly ask why, since we have as yet [see Bardhan [1967(6)] no reliable evidence as to what are the reasonable orders of magnitude that we should expect for this statistic. 1. Bliss, C. J. [1968a] 'On Putty-Clay', Review of Economic Studies, xxxv, pp. 105-32. 2. Bardhan, P. K. [1969] 'Equilibrium Growth in a Model with Economic Obsolescence of Machines', Quarterly Journal of Economics, LXXXIII, pp. 312-23. 3. Salter, W. E. G. [1960] Productivity and Technical Change (Cambridge: Cambridge University Press). 4. Salter, W. E. G. [1965] 'Productivity Growth and Accumulation as Historical Processes', Problems in Economic Development, ed. by E. A. G. Robinson (London: Macmillan), pp. 266-91. 5. Johansen, L. [1959] 'Substitution versus Fixed Production Coefficients in the Theory of Economic Growth: A Synthesis', Econometrica, XXVII, pp. 157-76. 6. Bardhan, P. K. [1967] 'On Estimation of Production Functions from International Cross-Section Data', Economic Journal, LXXVII, pp. 328-37._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Bliss I Christopher J. Bliss Avi J. Cohen Geoffrey C. Harcourt, Capital Theory Cheltenham 2005 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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