From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Dec 23 2004 - 10:59:58 EST
Michael, I'll want to read this excerpt again. Meanwhile, a few quick points: 1. Recessions may not improve best practice as much as bring capital into line with it. Webber and Rigby consider this type of technical change. 2. Even though a recession induced technological upgrading may increase the OCC, the recession induced cheapening of constant and variable capital may imply that the VCC (measured as c/v+s) does not rise proportionately. A point made by Mattick Jr. 3. Whatever the effect on the VCC, the new investments undertaken in a recession to ensure that costs fall faster than prices may require an increase in minimum capital requirements and thus lead to the concentration of capital. A point made long ago by Okishio. Yours, Rakesh
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