Volume: 8 Issue: 1

European Journal of Economics and Economic Policies: Intervention

›Cantabrigian Economics‹ and the aggregate production function

John S.L. McCombie

Abstract

In Cambridge, UK, in the late 1960s and early 1970s, there were some of the most distinguished post-war non-neoclassical economists, which included Nicholas Kaldor, Joan Robinson and Piero Sraffa. The Cambridge capital theory controversies seemed to have been decisively settled in Cambridge, UK's favour, yet no alternative paradigm emerged to challenge the prevailing neoclassical orthodoxy. This paper briefly looks at the reasons for this, including why the Cambridge capital theory debate, despite its important ramifications, is now largely forgotten. The paper concludes by looking at a further problem that vitiates the aggregate production function, resulting from the use of constant-price value data in econometric estimation. This criticism has also been widely ignored.

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