Wilfred E.G. Salter: The Merits of a Classical Economic Education

Ernst Weber ()

History of Economics Review, 2011, vol. 54, issue 1, 111-130

Abstract: During his honours research on an index of industrial production at the University of Western Australia, Wilfred Salter gained an understanding of the composite commodity theorem. The applied work on the index of industrial production provided him with the analytic foundations for his two famous contributions to economic theory, in capital theory and international trade theory. In his PhD thesis at the University of Cambridge he agreed with Joan Robinson that it is impossible to measure the aggregate capital stock because the assumptions of the composite commodity theorem do not hold in a general equilibrium framework. In the dependent economy model, however, Salter accepted the aggregation of exportables and importables because in a small open economy the terms of trade are unaffected by domestic economic policy. Thus, Salter recognised that the capital stock is an invalid aggregate in a macroeconomic model, but internationally traded goods are a valid aggregate in the dependent economy model. His success as an economic theorist lies in the fact that he understood when to apply the composite commodity theorem as an analytic tool, and when to avoid it.

Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/18386318.2011.11682184 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rherxx:v:54:y:2011:i:1:p:111-130

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rher20

DOI: 10.1080/18386318.2011.11682184

Access Statistics for this article

History of Economics Review is currently edited by John Harry Bloch and John Hawkins

More articles in History of Economics Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().