From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Tue Nov 23 2004 - 13:13:47 EST
At 9:30 -0800 23-11-2004, Ian Wright wrote: >According to Pasinetti's "lectures on the theory of production" the >paradigmatic Sraffian model has either an exogenous wage rate or >profit rate parameter. Choosing one determines the other, and fixes >relative prices. Hence, prices reflect the distribution of the surplus >between wages and profits. Assuming this to be a correct >characterisation, I'd be grateful if anyone could tell me of attempts >to "close" this model, in the sense of allowing wages, or profits, or >both, to be endogenously determined (rather than assuming that wages >or profits are determined by non-economic factors and hence not a >subject of economic analysis). My apologies if this is a hopelessly >naive question. Any help appreciated. > >-Ian. Hi Ian. The representation is fair. Actually Sraffa himself closes the model, or at least suggest a closure, with the interest rate fixed by Central Bank (and the banking system), which fixes the rate of profit and then the wage. This is not endogenous determination, I guess, but it is an economic factor. Remember that Sraffa didn't wanted a mechanical representation of the distribution: subsistence wage, or the like. In Italy somebody has used Kaldor's growth rate to close the model. The growth rate fixes again the rate of profit, and then the wage rate. In economic policy terms, this may give a kind of menu. In Italy, again, somebody proposed a conflictual determination of the wage. Unfortunately, I have no bibliographical references at hand in English now, except Sraffa's (§ 44), but I guess that you may find something if you look at journals near the surplus approach or their books. riccardo -- Riccardo Bellofiore Dipartimento di Scienze Economiche "Hyman P. Minsky" Via dei Caniana 2 I-24127 Bergamo, Italy e-mail: riccardo.bellofiore@unibg.it direct +39-035-2052545 secretary +39-035 2052501 fax: +39 035 2052549 homepage: http://www.unibg.it/dse/homepage/bellofiore.htm
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