More on the Aggregate Supply Function

  • Louise Davidson

Abstract

Veendorp and Werkema1 have raised some questions about the necessary productivity requirements underlying the slope of the aggregate supply function as developed from its Keynesian origins2 by Weintraub and Wells.3

Keywords

Income Assure Posit Clarification Univer 

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Notes

  1. 1.
    E. C. H. Veendorp and H. G. Werkema, ‘Mr Wells’ Aggregate Supply Function: A Comment’, Economic Journal, 71, 1961, pp. 634–6.CrossRefGoogle Scholar
  2. 2.
    J. M Keynes, The General Theory of Employment, Interest, and Money, (New York: Harcourt, 1936), pp. 25, 29.Google Scholar
  3. 3.
    S. Weintraub, An Approach to the Theory of Income Distribution, (Philadelphia: Chilton, 1958), chapter 2.Google Scholar
  4. Also P. Wells, ‘Keynes’ Aggregate Supply Function: A Suggested Interpretation’, Economic Journal, 70, 1960. Wein-traub’s development is more complete in that it is derived from microsupply curves. Moreover, it predates Wells’s analysis by more than two years. It is surprising, therefore, that in his 1960 article, Wells fails to cite Weintraub’s Income Distribution, book or an earlier article on the same topic, ‘The Micro- Foundations of Aggregate Demand and Supply’, Economic Journal, 67, 1957. Instead, he refers only to Weintraub’s less complete account of aggregate supply in ‘A Macroeconomic Approach to the Theory of Wage Determination’, American Economic Review, 46, 1956.Google Scholar
  5. 8.
    P. Wells, ‘A Further Comment’, Economic Journal, 71, 1961, p. 637.CrossRefGoogle Scholar
  6. 10.
    P. Davidson, ‘A Clarification of the Ricardian Rent Share’, Canadian Journal of Economics and Political Science, 25, 1959, p. 193, n. 12.CrossRefGoogle Scholar
  7. P. Davidson, Theories of Aggregate Income Distribution, (New Brunswick: Rutgers University Press, 1960), pp. 97–8.Google Scholar
  8. 11.
    D. E. Horlacher and E. Smolensky, ‘Increasing Employment, Diminishing Returns, and Relative Shares’, Canadian Journal of Economics and Political Science, 26, 1960, pp. 144–5.CrossRefGoogle Scholar
  9. 12.
    P. Davidson, ‘Increasing Employment, Diminishing Returns, Relative Shares and Ricardo’, Canadian Journal of Economics and Political Science, 26, 1960, pp. 147–8. Using the function suggested by Horlacher and Smolensky, X, = log*, (N, + 1) + N, if N, is increased tenfold (starting from the point where the M/A-, ratio begins to increase), then the marginal product of labour declines by 16.5 per cent; whereas, if N, is increased a thousandfold, then the total decline in the marginal product is 18.7 per cent.CrossRefGoogle Scholar
  10. 19.
    A. L. Marty, ‘A Geometrical Exposition of the Keynesian Supply Function’, Economic Journal, 71, 1961.Google Scholar
  11. 21.
    A. L. Marty, ‘A Geometrical Exposition of the Keynesian Supply Function’, Economic Journal, 71, 1961, p. 560.CrossRefGoogle Scholar

Copyright information

© Paul Davidson 1990

Authors and Affiliations

  • Louise Davidson

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