Wirtschaftspolitische Tagesfragen

Die Theorie der Volkswirtschaft

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Monograph

Identifikator:: 1756296928

URN:: urn:nbn:de:zbw-retromon-133687

Document type:: Monograph

Title:: Wirtschaftspolitische Tagesfragen

Place of publication:: Berlin

Publisher:: Selbstverlag des Reichsverbandes der Deutschen Industrie

Year of publication:: 1928

Scope:: 39 S.

Digitisation:: 2021

Collection:: Economics Books

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SEMAINE D’ETUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIOUE ETC. 1225 ced out this fact. In linear models the problems may look very dif- ‘erent from what they look in classical production theory. So there is absolutely no difference of opinion on that. But in my system the optimal prices have to be applied to specific enterprises and, ot course, in any given enterprise you certainly have very definitely an economy of scale, hence a non linear effect. You have to a large extent a continuous and non linear process. You do not have a constant return to scale ad infinitum. There are quite a number of pages of the paper I circulated, where I speak about non linearity, but unfortunately there was no ‘ime to go into it in my oral presentation Let me now say a few words about an aspect of non linearity. Suppose you consider a plant that uses either one of two factors of production. You want to influence the director of the plant by formulating incentives in such a way that: 1) The plant produces a certain amount of product; 2) It uses one of the two alternative ‘actors of production rather than the other. Then you may consider 1sing two non-linear incentives. You may define a premium as a non- inear function of the amount produced, and with a sharply-defined maximum at the point corresponding to the quantity which you want ‘o see produced. At the same time you may use an other premium regarding the choice of factors of production. Now this is, of course, a very simple example, but something similar can be used in other and more complex cases. You will readily recognize, however, that to work with a non-linear premium is a rather complex affair. You might perhaps do it in certain cases of very great importance but if is absolutely impossible to do it in all the micro-economic details which you have to face when you want to steer an actual economy [hat is why I put so much emphasis on this specific accounting me- dium which is derived from the system of optimal prices. Such a system of incentive is, of course, linear but it may to a large extent be protected against flip-flap effects for the reasons I mentioned. Prof. ISARD at this conference always reminded us that we had to think in terms of regional problems, and I am glad that he has always insisted on that. For my own sake I have not disregarded F171 Frisch - pag. 29

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