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How do you measure marginal productivity??

The real trick is getting your instructors to incorporate capital theory into their macroeconimc classes.

and this is to kaem.

If a hire a worker who contributes $100 to my output, then his marginal productivity is $100. To get back to Professor Boettke's point, now what if the worker's real wage exceeds his marginal productivity? Then only a fool or an altruist would hire him, and suffer losses in the process.

Ok, Kaem's point is not as ridiculous as it appears. The measurement is more complicated when several stages of production and a great diversity of factors of production are involved. In addition, this can only be measured ex post, so in reality an entrepreneur has to anticipate the marginal productivity and pay wages in accordance with that, but where humans are involved error is not excluded. By any means, the disconformity between marginal productivity and real wages is strengthened by the imposition of wage controls as it was the case during the 1990s.

Dear pro.f Boettke,

is there any good book on the market that explains, with the required degree of formality, the austrian theory? Something like what Galì is writing for the new-keynesian view on monetary policy...

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