Giffen goods, backward bending supply curves, price controls and praxeology; or, who’s afraid of the big bad boogie man of giffen goods and backward bending supply curves? Not us
DOI:
https://doi.org/10.52195/pm.v9i1.238Abstract
What is the status of claims about the effects of minimum wage laws? Empirical or praxeological? We claim the latter. How can the effect of such legislation be best analyzed under the assumption of mis-behaving supply (backward bending) and demand (positively sloped, based on positing Giffen goods) curves? In the usual manner: resource misallocation still occurs. But this is only arguendo. More radically, such curves are themselves problematic. Even more radically, this, too, applies to «well behaved» supply and demand curves as well.
Key words: Backward Bending Supply Curves, Price Controls, Praxeology, Giffen Goods, Logical Positivism.
JEL Classification: D0.
Resumen: ¿Cuál es el status del análisis sobre los efectos de las leyes de salario mínimo? ¿Empírico o praxeológico? Nosotros defendemos lo se gundo. ¿Pueden analizarse mejor los efectos de dichas leyes suponiendo curvas de oferta y demanda anómalas (como las de los bienes Giffen)? Como en el nálisis tradicional se produce una mala asignación de recursos. En todo caso, tanto tales curvas, como las tradicionales son muy problemáticas.
Palabras clave: Control de precios, praxeología, bienes de Giffen, positivismo lógico.
Clasificación JEL: D0.
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