[PEN-L:6854] puzzle

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Doug had prodded me into discussing my theory of competition.  Let me
propose a puzzle to test it.  Suppose you are given an exam which asked
you to explain, using neo-classical categories, how market economies
throughout the world could experience at the same time
1) rapid technological increase
2) falling wages
3) relatively stable profits
Cobb Douglas functions are optimal.

Note: while wealth of the rich has increased, this increase is
insufficient to explain any of the above.
 --
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 916-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx