Timeline for Production function in Solow Model
Current License: CC BY-SA 4.0
15 events
| when toggle format | what | by | license | comment | |
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| Mar 24 at 12:21 | comment | added | Adam Bailey | @1muflon1 I think you are probably right that $F_{LK}<0$ would be very strange, but don't find the explanation in your final paragraph convincing. A couple of suggestions: a) see Maths SE here, b) it might be helpful to consider what sort of isoquants would be implied. | |
| Mar 23 at 15:49 | comment | added | Giskard | @1muflon1 Your final comment is pure satire, I don't know what to write. Have a nice day. | |
| Mar 23 at 14:36 | comment | added | guest | Thank you 1muflon1 and @Giskard. The answer and the discussion that followed was helpful to me. | |
| Mar 23 at 14:30 | vote | accept | guest | ||
| Mar 23 at 13:05 | comment | added | 1muflon1♦ | @Giskard sigh, you can't have it both ways. Output could refer to both marginal or total output. Yes there are several possible margins like there are several possible outputs that can be referred to. So how can one be clear and another is not clear? Yes you assume bad faith, because when I clarified the former you assumed that I am lying to you and not what I was thinking of in my head. | |
| Mar 23 at 12:45 | comment | added | Giskard | New version of the statement however is unclear, as there are several possible margins you can think of. Losing the final paragraph is the simplest solution to the entire problem. | |
| Mar 23 at 12:45 | comment | added | Giskard | ? What do you mean? I am just pointing out it was not a clarity issue, the statement was clear and false. | |
| Mar 23 at 12:44 | comment | added | 1muflon1♦ | @Giskard I don't see any reason why you need to assume bad faith | |
| Mar 23 at 12:43 | history | edited | 1muflon1♦ | CC BY-SA 4.0 |
added 23 characters in body
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| Mar 23 at 12:42 | comment | added | Giskard | I think you meant to write "oh the way I wrote it was incorrect, I will make changes so that it reflects my thinking and is not a false statement", because it was not "unclear" it was incorrect. Happy to have helped! | |
| Mar 23 at 12:41 | comment | added | 1muflon1♦ | @Giskard oh I think I know what you mean, I was thinking on the margin, but I will edit it to the text to make it clear | |
| Mar 23 at 12:39 | comment | added | Giskard | I also think this is what it means, but you wrote something completely different: "when you increase both the amount of labor and capital in your factory at the same time output declines." | |
| Mar 23 at 12:37 | comment | added | 1muflon1♦ | @Giskard cross-derivative $f_{xy}$ tells you how the slope of x changes with respect to changes in y. $f_{xy}<0$ implies that with more y the slope of x becomes less steep. In a context of production that means that when we add more labor the marginal productivity of capital declines | |
| Mar 23 at 12:30 | comment | added | Giskard | "$F_{LK}<0$ says that when you increase both the amount of labor and capital in your factory at the same time output declines." Can you please explain why this says what you claim it says, and why it is not just a second order effect? By the same logic $F_{LK}=0$ would imply that increasing both inputs has no effect on the output, but $F(K,L) = K + L$ is a trivial counterexample to this. In fact, the less conventional $F(K,L) = K + L - 1/(KL)$ is a counterexample to your claim under most parameter combinations. | |
| Mar 23 at 12:27 | history | answered | 1muflon1♦ | CC BY-SA 4.0 |