Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Retrospectives: The Law of Diminishing Returns
Journal of Economic Perspectives
vol. 7,
no. 3, Summer 1993
(pp. 185–192)
(Complimentary)
Abstract
From introductory economics to theoretical papers, the law of diminishing returns is a part of every economist's tool kit. But the evolution of this law in the history of economic analysis reveals more complexity than is perhaps generally understood. Even among those most responsible for its evolution, the law has been loosely defined, and many so-called "proofs" of the law have been weak and incomplete. Moreover, those who expounded the law and its economic implications rarely offered empirical evidence to support it. In fact, economists have offered alternative explanations for rising short-run marginal cost curves and other implications of the law of diminishing returns. This last point raises an interesting question: Have economists used the law of diminishing returns simply for convenience, or is the law fundamental to economic analysis?Citation
Brue, Stanley L. 1993. "Retrospectives: The Law of Diminishing Returns." Journal of Economic Perspectives, 7 (3): 185–192. DOI: 10.1257/jep.7.3.185JEL Classification
- D24 Production; Cost; Capital and Total Factor Productivity; Capacity
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