Thread by @danieletavani

*Bad take* alert here. Neoclassical growth theory rests fundamentally on the f'(k) = r profit-max condition. There is no real wage without this, since w = f(k)-f'(k)k because of constant returns to scale in production. If the former falls, theory of distribution is bust. 1/

https://twitter.com/paulkrugman/status/1386338171147988998

Imo, the issue with Cambridge UK is not that they highlighted the issues with neoclassical growth & distribution (the muddle) but that they stopped there, w/o developing a coherent alternative on capital deepening, innovation, determinants of distribution, convergence, etc. 2/

There are contemporary, some of them old but still alive scholars who have been taking on these issues, training younger folks 2 press on. Lance Taylor, Krugman's first mentor, is one of them. Duncan Foley revived Charles Kennedy's theory of induced technical progress... 3/

...which provides an alternative to factor substitution that does not suffer of the Cambridge problem. See also Peter Skott on Kaldorian/Harrodian (often micro-founded!) models with bounded instability, Robert Blecker's work on open economy macro & distribution... 4/

Mark Setterfield, Amitava Dutt, Steve Fazzari on demand-driven growth, hysteresis... All of them have trained younger folks who are producing work addressing the issues above, & more (financialization/secular stagnation/ etc).
So yes, "we value thinkers for their best work." 5/

My point here is that there is lots of incredible work from Joan Robinson, including the "huge intellectual muddle", i.e. the capital controversy that she started. The issues she highlighted were put away, yes, but ripe to be taken up again. 6/

Let me close with this incredible paper by Baqaee and the late Farhi who revisited the problem in a much more general setting, & stated precisely how stringent the conditions for the existence of an aggregate production function are. academic.oup.com/jeea/article-a… /END.