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THE TWO‐SECTOR VON THÜNEN ORIGINAL MARGINAL PRODUCTIVITY MODEL OF CAPITAL; AND BEYOND
Author(s) -
Etula Erkko
Publication year - 2008
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2007.00293.x
Subject(s) - economics , differentiable function , capital (architecture) , productivity , homogeneous , wage , marginal product , neoclassical economics , mathematical economics , production (economics) , econometrics , microeconomics , macroeconomics , labour economics , mathematics , history , mathematical analysis , archaeology , combinatorics
ABSTRACT This article considers a two‐sector model of scalar capital from the perspectives of smoothly differentiable neoclassical technologies and also non‐differentiable technologies based on discrete alternative Leontief–Sraffa techniques. The analysis shows that in these Thünen‐like scenarios without joint production the real wage and the interest rate are necessarily in an inverse Ricardian tradeoff. This complements the findings of Samuelson and Etula (2006, Japan and the World Economy , 18, pp. 331–356) and completes the analysis of single homogeneous scalar capital.