From: Ian Wright (iwright@GMAIL.COM)
Date: Fri Sep 10 2004 - 00:05:51 EDT
Dear Dave (1) The 50/50 national income split is approximately reproduced in the social relations model, but this doesn't necessarily mean much because the wage rate is an exogenous parameter. I chose the wage rate to reproduce the empirical data, including a rough-and-ready reproduction of the national income split. But despite an exogenous wage rate I am confident that the model can be used to help answer this question. (2) Julian Wells is working on the distribution of the profit rate. According to Julian, some empirical measures are gamma, but many are not. In the social relations model the distribution can be approximated by a parameter-mix of ratios of normal variates with means and variances distributed according to a power-law. This is a 7-parameter distribution (i.e., it is more complex than most standard distributions) and it can sometimes look like a gamma, a skewed Laplace, an inverse Guassian etc. I have cc'd Julian on this message, as he may have something to add. F&M's argument may go through even with more complex distributional forms, however. But it may not. This paper is relevant http://home.mindspring.com/~ianusa/profitRate.pdf although it is very tentative. (3) When I get the time I will try to reproduce similar national income splits to your data in the social relations model and measure the variation of surplus value. I'll report back here when I have done that. It is an interesting question to ask of it. My initial guess is that a higher average surplus value will indeed increase the volatility of firm revenues in the simulation, but without detailed analysis I don't want to venture an explanation. Best wishes, -Ian.
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