M ainstream economists—Neoclassicals, in the narrow sense—have from time to time remarked on Israel Kirzner’s theory of entrepreneurship. They have maintained that Kirzner says things that do not fit into normal economic theory, that conflict with normal theory, that are too speculative to entertain, and that contradict other things he says. Their criticisms tell us why Kirzner is rebuffed by t...

The notes derive the salient features of optimal control theory for an infinite horizon objective function. For concreteness, the necessary and sufficient conditions are derived with reference to the neoclassical model of growth. However, the ideas easily extend to other economic problems. The need for the exercise arises from the lack of a single source which students can access for a developm...

Static neoclassical framework cannot be applied to model time dependent processes or increasing returns to scale in production. The dynamization of the neoclassical theory of a firm by dynamic optimization, on the other hand, assumes inconsistent profit functions with the former. As a solution to these problems, we present a dynamic theory of a firm consistent with the static neoclassical theor...

In this paper we show how moving from the neoclassical model to the more recent endogenous growth paradigm can lead to markedly different interpretations of the same growth accounting data. In neoclassical theory, even if between 30 and 70 per cent of the growth of output per worker in OECD countries can be ‘accounted for’ by capital accumulation, yet in the long run all of the growth in output...

A multi-country Schumpeterian growth model is constructed. Because of technology transfer, all R&D-performing countries converge to parallel growth paths. All other countries stagnate. Any parameter change that would have raised a country’s growth rate in standard Schumpeterian theory will permanently raise its productivity and per-capita income relative to other countries and raise the world g...

The neoclassical e®ects of permanent technology shocks on employment is re-investigated. Contrary to Jordi Gali's (1999) assertion published in this Review, I show that standard neoclassical theory is fully capable of explaining the stylized fact that positive permanent technology shocks reduce employment and that positive transitory nontechnology shocks increase labor productivity.

The present paper integrates neoclassical offer curves and production theory, introducing utility maximization and trade levels into the comparative static factor proportions model. The paper analyzes production conditions that determine the Metzler paradox that a tariff could lower the tariff inclusive import price. The model provides a more complete link between neoclassical and factor propor...

Neoclassical economic theory predicts equilibrium, yet the prediction is based on a string of patently absurd assumptions. Furthermore, evidence for instability is pervasive in the behaviour of real economies, implying that real economies are far from equilibrium and their behaviour potentially complex or chaotic. Therefore the neoclassical approach to understanding the behaviour of economies i...

The radiation power loss from a magnetically confined plasma in a stellarator has been calculated using neoclassical particle and energy fluxes in an energy balance equation. We could obtain a power loss of about 34% of the total input power by numerical calculation. This fraction of the power loss has been found to be in good agreement with the experimentally measured values of 30-40% for...