I want to understand
the current finance crises. That is the reason, why I study economic science. I
stumbled across an article written 1957 by George Stigler, who won the Nobel Memorial Prize in Economic Sciences
in 1982, in the Journal of Political Economy. Stigler states that the standard believe
that firms in a competitive environment face a horizontal demand curve is
totally wrong. The argument itself is remarkably easy. It is just the use of
the chain rule for derivatives. Teachers teach this math in school.
I cannot
find any indication regarding this result in standard textbooks. What is the
reason? Is there a mistake in the paper by Stigler? If that is the case I am particularly
interested in that. Or, and I think that is the main reason, the result does
not fit into the general principles of neoliberalism, which can be find today
anywhere in the economy, and is ignored. If that is the case, it would accentuate
my guess that the economy is not a science but a religion.
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