Author: Dmitry S. Petrenko

Abstract:

The paper considers conceptual framework of inframarginal economics, the history of inframarginal analysis as well as the theoretical bases that make inframarginalism distinct from neoclassical economics. The paper compares classical, neoclassical and inframarginal approaches. At the example of Adam Smith’s mathematical model the author demonstrates the algorithm for performing inframarginal analysis. The article along with a symmetric model of labour division for two economic agents uses a more complex model that treats transaction costs as a service. The impact of transaction costs on the degree of labour division and specialization of economic agents is examined. Finally, the results are compared with the postulates of the classical economics.

Keywords: inframarginal economics; inframarginal analysis; neoclassic; new classical model; economic organization; division of labour.