Competing Microeconomic Theories of Industrial Profits: An Empirical Approach

Alfred Eichner's life's work is testimony to the fact that—contrary to the impression given by most economics textbooks—microeconomics is not a monolithic discipline. Indeed, it is a fact that in addition to the standard neoclassical theory, there are at least two other major alternative theories that seek to account for the long-run behavior of industrial prices and the allocation of resources between economic sectors. Both post-Keynesian and classical (Marxian/neo-Ricardian) approaches to economics have developed a growing literature on microfoundations in recent years (see, e.g., Eichner, 1985; Dumenil and Levy, 1985).