 The Hicks-Malinvaud average period of production and 'marginal productivity': A critical assessmentThe European Journal of the History of Economic Thought, 2014, vol. 21, issue 1, 142-157 Abstract: Malinvaud took up the concept of the average period of production introduced by Hicks in Value and Capital and then Capital and Time , in an article of 2003 celebrating Wicksell's contribution to the theory of capital, where he observed that once techniques are ranked according to the average period for a given initial rate of interest, a rise in the rate of interest entails the use of a technique with a shorter average period. After a brief reconstruction of Malinvaud's argument, it is shown that the result is far less encouraging for neoclassical theory than it might seem. The most important problem is not the fact that change in the interest rate affects the average period of production associated with a technique, despite the concern this aroused in Hicks and Malinvaud, but rather that it affects the ranking of techniques. An example with two techniques is used to show that a rise in the rate of interest entails the use of a technique with a shorter average period even in the case of reswitching simply because the ranking of techniques is inverted at the two switch points. Date: 2014 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eujhet:v:21:y:2014:i:1:p:142-157 Ordering information: This journal article can be ordered from DOI: 10.1080/09672567.2012.683022 Access Statistics for this article The European Journal of the History of Economic Thought is currently edited by José Luís Cardoso More articles in The European Journal of the History of Economic Thought from Taylor & Francis Journals |
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