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My thread on Joan Robinson & the #capital controversy blew up. Thanks 2 all that engaged with it (without trolling)!
In the interest of building rather than burning bridges, here's some more thoughts I hope people will pay attention to. 1/
In the interest of building rather than burning bridges, here's some more thoughts I hope people will pay attention to. 1/
The main point was that r = MPK cannot be generalized 2 heterogeneous capital goods, & this is a problem for the marginalist theory of distribution.
The question is: are there frameworks where distribution is independent from a "well-defined marginal product of capital"? 2/
The question is: are there frameworks where distribution is independent from a "well-defined marginal product of capital"? 2/
Yes. #Idea-based #growth models are one such framework. In Romer 90, Aghion-Howitt 92, & following literature, the rate of return is determined from the opportunity cost of innovation (R&D #arbitrage).
In a thought-provoking but overlooked book, Andre Burgstaller (1994)... 3/
In a thought-provoking but overlooked book, Andre Burgstaller (1994)... 3/
...has argued that one unifying principle across both classical political economy & the marginalist school is the tendency of arbitrage opportunities to be competed away, absent forces that prevent it from happening.
Mathematically, arbitrage takes the form of... 4/
Mathematically, arbitrage takes the form of... 4/
... Hamilton-Jacobi-Bellman (HJB) equations.
R&D arbitrage in Romer 90 or Aghion-Howitt 92 is one example.
Another example: @WilliSemmler has shown in the 80s that classical systems of "prices of production" can be obtained as steady-state of HJB systems. 5/
R&D arbitrage in Romer 90 or Aghion-Howitt 92 is one example.
Another example: @WilliSemmler has shown in the 80s that classical systems of "prices of production" can be obtained as steady-state of HJB systems. 5/
I find Burgstaller's argument very persuasive. I learned about it from Duncan Foley & Tom Michl ( @tmichl69) who built on it 2 motivate the use of dynamic optimization in the 1st edition of @GrowthDist-widely considered a "heterodox" book-esp. in the chapters on land & nat res. 6/
This has not changed in the 2nd ed.
More importantly, I think that agreeing on some foundational aspects can be useful in building bridges & shared knowledge among different schools of thought in #economics.
I'm interested in engaging. I try to do it in my research. 7/
More importantly, I think that agreeing on some foundational aspects can be useful in building bridges & shared knowledge among different schools of thought in #economics.
I'm interested in engaging. I try to do it in my research. 7/
In one ideal world, "heterodox" folks would not presume that "mainstream" folks are necessarily ideological.
And "mainstream" folks would not presume that "heterodox" folks are necessarily badly trained.
(I am using "" on purpose). 8/
And "mainstream" folks would not presume that "heterodox" folks are necessarily badly trained.
(I am using "" on purpose). 8/
I realize that incentives in academia, and especially in #econ, do not line up toward the "ideal" that appeals to me. & people's personalities can get in the way.
One thing I can focus on is being open-minded, willing to learn & engage constructively.
I hope others do 2 /end
One thing I can focus on is being open-minded, willing to learn & engage constructively.
I hope others do 2 /end
