From: Ian Wright (wrighti@ACM.ORG)
Date: Fri Jun 09 2006 - 16:13:41 EDT
Hi Allin I elaborate on the below in my response to Paul. > To put it differently, r = 0.1 is just a wildcard, undefined, > unless I know the period to which this interest rate applies. A price has got nothing to do with time. The price of money-capital does not tell us about profit income (or interest) received in a period. A price is an exchange rate against money. A price is a label, a nominal, not an actual, quantity of money. Only when actual quantities of money-capital are supplied is actual interest received. This is when the time comes in, because quantities are supplied, or "loaned", during a period of time. I hope you can see that this is not economic nonsense. r is very clearly defined in the circular flow. It is Sraffa's r. It also happens to be the price of money-capital and equal to S/(C+V). Best wishes, -Ian.
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