In the circulating capital model, the RRI and the rate of profit are the same. Duncan >Julian, > > >1. I agree Marx never used the RRI. Note that he transforms values into > prices of production with the assumption that capitalists will have > equal rate of profits when prices of prodution prevail. > >2. Given fixed capital, no one decides to invest or not to invest on the > basis of a simple rate of profit. That is, if two capitalists told > you what their rates of proft are for a given year, you wouldn't > be able to say which of the two has made the better investment. More > important, another capitalist would not be able to decide whether or > not to make the same investment as either of the two had made. > > >3. Sraffa and others do construct simple models with fixed capital in which > the RRI's are equal but the rates of profit as usually defined are not. > >4. My questions were a result of my confusion concerning how one makes the >usual > correction of Marx on transfaormation given fixed capital. > > >John > > > > > > > >At 07:39 PM 11/29/2000 -0000, you wrote: >>John Ernst wrote [OPE-L:4577] >> >> things >>I don't get. >> >>1. Is the rate of profit or the RRI equal in all sectors after the >>transformation? >> >> >>John, by RRI are you referring to the rate of return on each *chunk* of >>investment, as distinguished from the rate of profit calculated over all >>capital (I think this is the usual usage?). >> >>I have to say that it's never occurred to me that Marx might have had in >>mind equalisation of the RRI, and I don't think I've ever read anything by >>anyone who appeared to think this. >> >>Would you like to enlarge on what prompted your question? >> >>Julian >> >> -- Duncan K. Foley Leo Model Professor Department of Economics Graduate Faculty New School University 65 Fifth Avenue New York, NY 10003 (212)-229-5906 messages: (212)-229-5717 fax: (212)-229-5724 e-mail: foleyd@cepa.newschool.edu alternate: foleyd@newschool.edu webpage: http://cepa.newschool.edu/~foleyd
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