I am interested how the founding fathers of neoclassical economics like Marshall, Léon Walras and Carl Menger conceived production. I am specifically interested how they conceived physical input output relations of the production.
In the case of Walras, I found that he assumed a set of fixed coefficients meaning that input and output are homogeneous of order 1 (Eléments #246). He considered that the set of coefficients can be varied when the prices of services and products changes (Eléments #247).
In the case of Marshall's Principles, Book IV is titled The Agents of Production, but this book is mainly an explanation of production factors and their classification. Book V, Chapter XII argues increasing returns, but I cannot find any good explanation how he considers input-output relations in productions. Book III, Chapter XIII argues increased and diminished returns but I cannot distinguish the effects of price changes and the change of physical input-output relations.
Do you know some good articles which argued these points? Do you have any information on Menger with this regards?
@Yoshinori, I can only offer a small personal insight regarding the treatment of physical I-O relationships in the neo-classical era of the '60's and mid-70's. At that time "William 'Bill' Gosling. then at UEA, published monograph specifically concerning Input-Output Coefficients which included that phrase in its title. He was also chair of the Uk Input-Output Society, which I find little trace of. In his teaching he was quite clear that technology of production had to be handled as a 'given' with the unfortunate result that even then it was apparent in any I-O based macro-economic model based on the annual figures that were all that was available at that time the technological and institutional parameters of any model's environment were changing more frequently than one could build a time series with sufficient data points to be statistically sound in any predictions drawn from it. At that time we were seeing the effect of shifts in the conditions of production invalidating sets of coefficients at about 7 year intervals, though I hesitate to call it periodicity or cycles. In those days we only had about 20 years of reasonable quality data to work with for the UK economy so any deep insights were not available. Mainframe computer power of any substance was also still a dream. Gosling's courses were delivered within a departmental focus on Samuelson's basic texts, but he ofcoourse was more concerned with Leontieff's work. Perhaps the UEA library service may have more of his work in their archives and they may discuss more deeply some of the issues that you are asking about. Best regards, @Robin Jarvis
Thank you, Robin. Marshall is too vague, ambiguous and talkative for me. Maybe he wanted to cover all things and became a naturalist of the economy.
Your description of Gosling's course gives me some nostalgic feeling although I never visited the University of East Anglia.
With best. Yoshinori
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