Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277482 
Year of Publication: 
2020
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 17 [Issue:] 2 [Year:] 2020 [Pages:] 265-275
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
This paper focuses on a key concern of the Cambridge capital controversies: Sraffa's theoretical demonstration that competitive relative prices, and hence the money value of aggregate capital, can vary in complex ways as the wage share (profit rate) changes. We find that, on the contrary, individual prices are usually linear or mildly curved. We develop a formal measure of curvature, and find that average price curvature does not fall with matrix size as proposed in Brody's random matrix hypothesis. Since the average curves are near-linear, it follows that aggregates such as capital, wages, and net output will exhibit the same behavior. We believe this explains the widely observed near-linearity of the wage–profit curve.
Subjects: 
Sraffa
prices
production functions
input-output
wage-profit curves
labor theory of value
JEL: 
B15
C67
D46
D64
P16
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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