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Tag Archives: Sraffa Effects

Wages, Employment Not Determined By Supply And Demand

1.0 Introduction I do not think I have presented an introductory example in a while in which an increased wage is associated with firms wanting to employ more labor, given the level of net output. This example is presented as a matter of accounting for a vertically integrated firm. Exact calculations with rational numbers are tedious in this example. I expect that if anybody bothers to check this, they would use a spreadsheet. As far as I can tell, Microsoft Excel uses double precision...

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A Perverse Switch Point For Neoclassical Economics, Non-Perverse For Austrians

Figure 1: The Wage-Rate of Profits Frontier1.0 Introduction This post completes a demonstration that the economic life of a machine is independent of the capital-intensity of a technique. I here fill in the upper right of a two-by-two table. I have previously filled in the upper-left and lower right entries. And I also have an example for the lower left. 2.0 Technology Tables 1 and 2 present coefficients of production for processes which can be combined to produce a new output of corn....

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Perverse Switch Point For Austrian Economics

Figure 1: The Wage-Rate of Profits Frontier This post continues a series of posts demonstrating that the change in the economic life of a machine at a switch point is independent of the change of the capital intensity of the technique at a switch point. I here fill in the lower left in a a two-by-two table. The wage curves above are for the an example with the same structure as in the previous post in this series.This is a 'one-good' model. The manager of firms know three processes to...

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Traditional And ‘Perverse’ Switch Points For Austrian And Neoclassical Economics

Figure 1: The Wage-Rate of Profits Frontier1.0 Introduction This is one in a series of posts demonstrating that the change in the economic life of a machine at a switch point is independent of the change of the capital intensity of the technique at a switch point. I want to illustrate each entry in a two-by-two table in a previous post. The example in this post has two switch points. One fits the traditional Austrian and neoclassical stories, as in the entry in the upper-left of the table....

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Variation On An Example From Schefold

Figure 1: Variation in the Economic Life of a Machine with Technical Progress This post varies the coefficients of production in an example from Bertram Schefold. I wanted to have 'nice' fractions at a time of zero. Qualitatively, this looks like a previous post. Reviewers for a recent rejection of an article with another fixed capital example objected to this type of model. I need to relate technical progress to a well-known type (Harrod-neutral, Marx-biased, or whatever) or produce some...

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Austrian Economists Rediscovering Sraffa

Some recent papers by economists of the Austrian school rediscover some aspects of post-Sraffian price theory. Others would benefit from more knowledge of post-Sraffian price theory. But the authors do not know this. Fillieule (2007) is a rediscovery of Sraffa's standard commodity. He sets out a special case of Hayekian triangles in which an infinite series of datad labor inputs are used to produce current net output. "Only circulating capital is taken into account", and "the proportion...

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A Parameter Space for an Example of Harrod-Neutral Technical Progress

Figure 1: A Two-Dimensional Parameter Space The above is for this example. I wish somebody would be inspired by this to write it up with mathematical proofs. What I see here is found by numerical methods. Figure 1 shows a partition of the parameter space based on fluke switch points. The dashed line shows the temporal path in the previous post. Each of the solid lines are parallel affine functions, with a slope of unity. A proof that these slopes are unity should be able to handle a model...

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Another Example of Harrod-Neutral Technical Progress And The Choice Of Technique

Figure 1: Variation in the Maximum Wage and the Cost-Minimizing Technique with Time This post presents an example in which some coefficients of production vary from those in example. Reswitching, capital reversing, and the reverse substitution of labor do not arise in this example. Table 1 shows the coefficients of production for this example. The labor coefficients vary identically with the the labor coefficients in the previous example. a2,1(a), a3,1(a), a2,1(b), a3,1(b), a1,2(c),...

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Harrod-Neutral Technical Change And The Choice Of Technique

Figure 1: Variation in the Maximum Wage and the Cost-Minimizing Technique with Time1.0 Introduction I thought I would revisit the application of my analysis of fluke switch points to an example of Harrod-neutral technical change. Two techniques are assumed to experience Harrod-neutral technical change. The same commodities are produced with both techniques. No capital goods are produced for one technique that are unproduced in the other. Consequently, the techniques have no processes in...

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Variations in the Economic Life of Machines

These posts demonstrate, in a model of fixed capital, that the cost-minimizing choice of the economic life of a machine need not conform to traditional Austrian and marginalist theory. The cost-minimizing choice of technique around a switch point might associate a shorter economic life of a machine with an increased capital intensity. This counter-intuitive variation of the economic life of a machine is independent of capital reversing and the re-switching of techniques, both of which are...

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