My friend and department Chairman Jeff Herbener has a chapter included in the new book The Economic Theory of Costs: Foundations and New Directions edited by Matt McCaffrey and published by Routledge. Herbener's chapter is entitled "Time and the Theory of Cost" The abstract reads as follows:
Production costs in Neoclassical models account for the physical conditions of production (MPP) and consumer demands (MR) but fail to incorporate time across the structure of production. Incorporation of real time in production necessitates the recognition that capitalist-entrepreneurs make production decisions. They discount the MRPs of factors when buying them in advance of selling their output and they must speculate about the DMRPs of factors in the face of uncertainty of the future when deciding what they will pay for them. This chapter develops a theory of cost in light of capitalist-entrepreneurs acting in real time.
It is a joy to work with colleagues who continue to add to our understanding of the laws of economics.
