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von Thünen: Capital, Production Functions, Marginal Productivity Wages, and the Natural Wage
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Bjarne S. Jensen
Published/Copyright:
November 30, 2019
Abstract
This paper puts seminal contributions to theory of production functions and maximization of explicit quantitative objective functions by Johann Heinrich von Thünen into a systematic historical perspective. We show that his comprehensive ‘Tableau Economiques’ do imply two exact parametric production functions. Moreover, the renowned ‘geometric mean wage’ formula is restated as an exact CES marginal labor productivity wage for σ= 2. We review four alternative modes of normative (natural) wage calculations without an explicit production function, and conclude that von Thünen’s natural wage differentiation formulas are bona fide alternatives for deriving the natural wage formula.
Keywords: Production functions; marginal productivity and substitution elasticity; objective function; natural wage.
Published Online: 2019-11-30
Published in Print: 2017-02-01
© 2019 by Walter de Gruyter Berlin/Boston
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Keywords for this article
Production functions;
marginal productivity and substitution elasticity;
objective function;
natural wage.
Articles in the same Issue
- When a Door Closes, a Window Opens? Long-Term Labor Market Effects of Involuntary Separations
- Candidates’ Education and Turnout: Evidence from Italyn Municipal Elections
- von Thünen: Capital, Production Functions, Marginal Productivity Wages, and the Natural Wage
- On the Incentive Effects of Sample Size in Monitoring Agents – A Theoretical and Experimental Analysis
- On Estimating the Size of the Shadow Economy
- Reply to Gebhard Kirchgässner
