scholarly journals Solving the Reswitching Paradox in the Sraffian Theory of Capital

2019 ◽  
Author(s):  
Carlo Milana
Keyword(s):  
Sraffian Theory

Toward a Post-Sraffian Theory of Income Distribution

1994 ◽  
Author(s):  
A. Roncaglia
Keyword(s):  
Income Distribution ◽  
Theoretical Framework ◽  
Distribution Theory ◽  
Social Classes ◽  
Modern World ◽  
Sraffian Theory ◽  
Over Time

After recalling the Sraffian critiques to marginalist distribution theory, and hence the need for a different approach, the paper illustrates the classical conceptualization of social classes and its flexibility for the application to the modern world. The relationships among market forms-above all oligopoly, mark-up pricing, and income distribution-are then discussed, in search of a theoretical framework for the analysis of the evolution of distributive variables over time: an approach suggested as superior to the traditional one which aims at determining equilibrium values for the distributive variables at a moment in time.

A baseline supermultiplier model for the analysis of fiscal policy and government debt

2020 ◽  
Vol 8 (3) ◽  
pp. 313-338 ◽  
Author(s):  
Fabio Freitas ◽  
Rodrigo Christianes
Keyword(s):  
Fiscal Policy ◽  
Income Distribution ◽  
Government Debt ◽  
Monetary Theory ◽  
Tax Rates ◽  
Wage Share ◽  
Endogenous Variables ◽  
Government Deficit ◽  
The Interest Rate ◽  
Sraffian Theory

The article presents a basic Sraffian supermultiplier model for the analysis of fiscal policy and government debt. First, we discuss the assumptions and the equilibrium and stability properties of the model. Next, we investigate the effects on the main endogenous variables of the model (including the primary government deficit and debt ratios) of changes in the rate of growth and composition of autonomous demand, in the tax rates on profits and wages, and in the rate of interest. The analysis of the impacts of changes in the interest rate is conducted according to two possible closures for the Classical/Sraffian theory of income distribution. In the first closure the changes in the rate of interest do not affect income distribution between wages and profits, which implies that its influence over the endogenous variables operates only through the financial component of total government deficit. The second closure is the monetary theory of distribution, according to which there is an inverse relationship between the rate of interest and the wage share. In this case, besides the pure financial effect, we show that the change in the rate of interest affects the economy through the equilibrium value of the supermultiplier and the tax burden.

THE IMPORTANCE OF THE SRAFFIAN THEORY OF ECONOMICS TO CYBERNETICS

Kybernetes ◽  
1986 ◽  
Vol 15 (1) ◽  
pp. 42-42
Author(s):  
S.A. MAJID
Keyword(s):  
Sraffian Theory

scholarly journals Solving the Reswitching Paradox in the Sraffian Theory of Capital

2019 ◽  
Vol 6 (6) ◽  
pp. 97
Author(s):  
Carlo Milana
Keyword(s):  
Interest Rate ◽  
Theoretical Analysis ◽  
Income Distribution ◽  
Neoclassical Theory ◽  
Relative Prices ◽  
The Interest Rate ◽  
Capital Intensive ◽  
Theory Of Production ◽  
Input Prices ◽  
Sraffian Theory

The possibility of the reswitching of techniques in Piero Sraffa’s intersectoral model, namely the recurring capital-intensive techniques with monotonic changes in the interest rate, is traditionally considered as a paradoxical violation of the assumed convexity of technology putting at stake the viability of the neoclassical theory of production. It is argued here that this phenomenon can be rationalized within the neoclassical paradigm. Sectoral interdependencies can give rise to the well-known price Wicksell effect, which is the revaluation of capital goods due to changes in relative prices triggered by monotonic variations in income distribution. The reswitching of techniques is, therefore, the result of cost-minimizing technical choices facing returning ranks of relative input prices in full consistency with the pure marginalist theory of factor rewards. The theoretical analysis proposed in this article is applied empirically to the counterexamples of various case studies presented in the literature.

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