Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 107 decrease in Y, and this in turn will unleash added quantities of Y and will cause the supply of X to shrink still more. Though mathematically a new point of equilibrium can be found, its economic significance, if any, is not certain. If only those units of a factor which continue to be supplied were to be consulted, they would wish not only that their number should remain stationary under prosperity, but that it should actually decrease. The surviving units would be still further aided if the rival factor actually poured forth more of itself whenever the remuneration per unit of this second factor is decreased. With two factors having negative supply curves, an increase in the effective bargaining power of one results in a cumulative showering of advantages upon the factor which improves its position and a cumulative degradation of the factor which does not. It would be a continued process of giving to him that hath and of taking away from him that hath not. This would indeed be unstable equilibrium. The same forces would be set at work although to a lesser degree, if the factor which improved its position were, while of positive elasticity, to have a lower coefficient of elasticity than that of the factor with the negatively inclined supply curve. It may also be said that the changes in return per unit which I have sketched as being created by a change in bargaining power, seem, according to computations made by my associate, Mr. S. W. Wilcox, to be true also as regards the relative share of the total product secured by each in the case of the more plausible formule experimented with for the equation giving product as a function of the number of units of the factors of production. 8B. The Influence of the Relative Proportion of the Total Product Received by the Factors It is not pretended that the influences upon distribution of the respective supply curves which have been sketched above are the sole forces determining the unit and proportional returns received by each of the factors of production. That they do affect in an important manner the amounts and shares received has, I hope, been demonstrated by the necessarily summary discussion which has been given. But there are other factors to be considered and other problems which must be solved before we can arrive at

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