Tag Archives: Sraffa Effects

Figure 1: Wage Curves for the Example1.0 Introduction The Cambridge Capital Controversy (CCC) applies to models both of competitive industries and of non-competitive industries. Around a switch point exhibiting capital-reversing, a higher wage is associated with greater employment per unit of net output produced. It is not merely a question of what technology is available. It is also a matter of the power of firms among industries to extract value from their workers, their upstream...

I have a working paper at the Centro Sraffa. Abstract: This article considers structural economic dynamics, in models with fixed capital and a choice of technique, of the production of commodities. Fluke switch points are described and cataloged. For fluke switch points, parameter perturbations create a qualitative change in how the choice of technique varies with distribution. Techniques are presented for visualizing partitions of parameter spaces such that the analysis of the choice of...

1.0 Introduction In my ROBE article, I consider fluke switch points arising from perturbations of coefficients of production in the Samuelson-Gargenani model, but in the case with only circulating capital. An obvious generalization is to consider fixed capital. This generalization is simplified by restricting oneself to the case in which machines operate with constant efficiency. Steedman (2020) analyzes this case, and this post is a start on working through elements of the corn-tractor...

'Paradoxes' and 'Perversities' PhenomenonExampleRegionReswitching'One good'5Schefold reswitching3Schefold roundabout3Baldone8Recurrence of technique (without reswitching)Baldone9Recurrence of truncation (without reswitching or recurrence of technique)Two sectors with fixed capital2Non-monotonic variation of economic life of machine (without reswitching or recurrence of technique or of truncation)Baldone10'Non-continuous' variation in economic life of machine associated with infinitesimal...

Figure 1: A Two-Dimensional Pattern Diagram, Enlarged1.0 Introduction This post further generalizes an example from Salvatore Baldone.. Like an example from Bertram Schefold, I find that Baldone's example is in a wedge near the edge of the appropriate region in one of my partitions of a parameter space. I have some very complicated spreadsheets that allow me to quickly visualize the effects of varying parameters. Baldone and Schefold were working long before Visicalc, Microsoft Excel, or...

Figure 1: A Pattern Diagram, Enlarged1.0 Introduction This post looks at and generalizes an example of the recurrence of techniques by Salvatore Barone. It is an example with fixed capital illustrating the recurrence of the period of truncation. In the generalization, I find what I call patterns over the axis for the rate of profits, a patern over the wage axis, a three-technique pattern, and a reswitching pattern. Barone's example demonstrates that around a switch point, a lower rate of...

Figure 1: A Pattern Diagram with Triple Switching In demonstrating the lack of foundation for claims of the Austrian school about the supposed relationships between a greater supply of capital, a consequent lower rate of profits, and a longer period of production, I have so far only presented examples in which the economic life of an existing machine can be extended or truncated. Schefold (1980: 170) interprets a more roundabout technique as one in which a long-lived machine is used to...

Figure 1: Variation of Choice Of Technique with a Coefficient of Production This post continues the analysis of this example. The coefficients of production and the techniques are the same as in the linked post, except here I consider the results of varying a1, 2, the amount of corn needed as circulating capital in operating Process II at unit level. Figure 1 above shows how the choice of technique varies with this parameter. This is a two-sector model, in which new machines and corn are...

Figure 1: A Pattern Diagram This post illustrates the numeric example used here. The example is of an economy in which two commodities, iron and corn, are produced by workers from inputs of iron and corn. Two processes are available for each industry, leading to a choice among four techniques. I analyze stationary states. I look at prices of production, with a bushel corn as numeraire and wages paid out of the surplus at the end of the year. Prices of production are defined so as to allow...

I have a working paper. Abstract: This article extends to unequal rates of profits a derivation of prices of production from a linear program. A partition of the price-wage space is illustrated in an example with two produced commodities. The variation in the solution of the LP with perturbations of relative markups is illustrated. This analysis provides an intuitive explanation of how the reswitching of techniques and of how capital reversing can emerge in non-competitive markets.