Production Functions, Capital, Marginal Productivity Wages, and the Natural Wage: von Thünen

Bjarne S. Jensen ()
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Bjarne S. Jensen: University of Southern Denmark (SDU)

Chapter Chapter 3 in The Elements and Dynamic Systems of Economic Growth and Trade Models, 2025, pp 49-86 from Springer

Abstract: Abstract This chapter 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 $${\sigma =2}$$ . 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 factor productivities; Substitution elasticities; Normative functions; Natural wage; von Thünen (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-52493-6_3

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DOI: 10.1007/978-3-031-52493-6_3

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