Re: [OPE-L] price of production/supply price/value

From: Ian Wright (wrighti@ACM.ORG)
Date: Thu Feb 23 2006 - 19:17:29 EST

Hi Paul

I haven't got good answers to your questions regarding dynamic
multi-sector models and the correct level of abstraction. This is not
an area I have studied. I believe getting the right conservation
relations are a precondition for causal theories. The TP is a kind of
non-conservation result.

> It would be extraordinarily difficult to construct a dynamic model
> using physical quantities where the least perturbation would not
> break the equal rate of profit.

I was thinking that the model should include capital reallocation, as
per the classicals.

> One can not construct a dynamic model including physical quantities
> without also modelling stocks of finished products - either held by
> a wholesaling sector or by the original manufactureres.

Why is that? Why not -- to begin with at least -- only flows?

> From attempts to build dynamic Sraffa inspired models in the
> past I note that it is very hard to get a price adjust ment mechanism
> that is stable - i.e, does not produce wild fluctuations in prices that
> can lead to whole industries going out of business.

Aren't there some theoretical results on price/quantity instability in
multi-sector models?


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