The Cobb-Douglas Production Function and Political Economy
17 Pages Posted: 8 Feb 2010 Last revised: 1 Apr 2013
Date Written: March 30, 2013
In classical and Marxian political economy economic advancement takes place in stages of development. These stages are characterized by different functional distributions of income. In this paper we show that the Cobb-Douglas Production Function is the only production function which has the property of a constant functional distribution of income of the factors of production. Furthermore it is argued that an aggregate production function is not appropriate to analysing macro-economic processes of a capitalist economy. But it is a very useful tool in the hands of a socialist planning authority.
Keywords: political economy, classical economics, Marxian economics, socialist economics, aggregate production function, functional distribution of income, Cobb -Douglas Production function, stages of economic development, Historical Materialism
JEL Classification: B12, B14, B51, E25, O11, O20, P16, P21
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