[OPE-L:4677] Equalising RRIs?

From: P.J.Wells@open.ac.uk
Date: Mon Dec 11 2000 - 11:06:06 EST


John Ernst wrote [#4591]


Given that we are to use an average RRI in computing prices
of production,  I'm still unclear and repeat my question.

"How do you compute the values that are to be transformed from a given
set of physical quantities?" 

I've delayed commenting for extraneous reasons, but the extra time to think
has added an extra dimension to my query here.

John, should we understand this claim that RRIs are to be equalised as
yours, or your take on Marx's? My initial reaction was surprise because I
had always taken it for granted that Marx here assumed equalisation of
returns calculated over *all* capital employed in a given time period.

My additional question is:

Doesn't demanding equalisation of RRIs amount to demanding an inter-temporal
aspect to the hypothetical long-run equilibrium (in the sense that in the
short run one could have different RRIs on different vintages of capital
even if average profit rates were equalised)?

Many thanks to John for raising this interesting issue, which is certainly
quite novel to me.

Julian



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