Drews Institutionalized Divvy Economy
STANFORD UNIV CA OPERATIONS RESEARCH HOUSE
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The paper is a simplified version of an economy considered by W. P. Drews, in which the sizes of the institutionalized consumer groups and the prices charged by other institutions controlling resources are manipulated by these institutions in an effort for each to achieve its share of the total money flows as agreed upon by the political process for example by traditions and negotiations. This institutionalized view of the economy injects into the usual framework of technological relations an additional mechanism which Drews calls the invisible band, the political process, which can arbitrarily set the proportions of total money flows to different institutions. The purpose is to show that once these are agreed upon, all other quantities, such as the levels of industrial production, prices of consumer goods and resources, and the sizes of consumer groups can be determined. Brouwers Fixed-Point theorem is applied to prove the last statement.
- Economics and Cost Analysis
- Operations Research