Pages

 

Just the Facts, Ma'm

0 comments
As far as I am concerned, the marginal variable cost curve for an industrial plant is typically a reverse L-shape. Industrial firms generally practice some sort of administrative, full-cost, or markup pricing policy. Empirical work on this point, I guess, goes back at least to Hall and Hitch. Post Keynesians will look back to Kalecki. (Sraffians have argued that Kaleckian models should be modified to incorporate a dependence of relative prices on distribution.) Steve Keen cites a recent book by Alan Blinder et al to the same point. And James Galbraith's empirical results suggest Kalecki was on to something in his classification of economic sectors.

Tyler Cowen wants to know how to avoid teaching students these ideas. I do like “Person’s” query in that thread:
”Stupid question: how about just admitting that businesses price based on (expected) average cost, instead of carving out all these epicycles? I'm just asking, is all.”
(Tyler Cowen is amusing here, too.)

0 comments:

Post a Comment

  • Greenspan's Cult of Personality... Review topics and articles of economics: Alan Greenspan was a legend in his time and there was no shortage of praise for him back then. For example, who can forget Bob Woodow's 2000 book Maestro: Greenspan's...
  • Yes Tyler, Low Interest Rates Matte... Tyler Cowen is wondering whether the Fed's low interest rates in the early-to-mid 2000s really were that important to the credit and housing boom of the early-to-mid...
  • The Eurozone Crisis: Deja Vu... Review topics and articles of economics: Randal Forsyth sees similarities between the current unfolding of the Eurozone crisis and that of the U.S. financial crisis a few years back:Just as the problem on this...
  • Charles Plosser and the Burden of F... The Economist's Free Exchange blog is shocked to hear this from Federal Reserve Bank of Philadelphia President Charles Plosser:"Since expectations play an important role...
  • Arnold Kling and Expected Inflation... Review topics and articles of economics: What do we know about expected inflation? According to Arnold Kling not much if we look to financial markets:I'm also not convinced that we can read expected inflation...
  • A Paper on Stabilizing Nominal Spen... Given the recent discussion on stabilizing nominal spending as a policy goal I found this article by Evan F. Koenig of the Dallas Fed to be interesting: The article...
  • Why The Low Interest Rates Mattered... Review topics and articles of economics: This is the second of two posts detailing why the Fed's low interest rate policies in the early-to-mid 2000s was one of the more important contributors to the credit and...
  • Why The Low Interest Rates Mattered... This is the first of a two-part follow up to my previous post, where I argued that the Fed's low interest rate policy was a key contributor to the credit and housing...
  • The Stance of Monetary Policy Via t... Review topics and articles of economics: There has been some interesting conversations on the stance of monetary policy in the past few days between Arnold Kling, Scott Sumner, and Josh Hendrickson. Part of...
  • Scott Sumner's New Best Friend:... Joseph Gagnon is calling for $6 trillion more in global monetary easing. This should not be too hard to implement since the Fed is a monetary superpower.Update: The...
 
Review topics and articles of economics © 2011 Just the Facts, Ma'm