From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Tue Mar 13 2007 - 13:31:39 EDT
At 10:49 -0800 12-03-2007, Ian Wright wrote: >Hi Riccardo > >>However, likely all three would (rightly) strongly object to your >>labelling his model as "half-equilibrium" system. > >The observation is Joan Robinson's. Sraffa's single production model >is only half an equilibrium system because a nominal distribution of >income is specified (your "given distributive rule") but the >corresponding real distribution of income is not specified (i.e. >precisely what consumption bundles are consumed). The system has a >missing closure. This asymmetry has the purported advantage that the >income distribution can be hypothetically considered as a nominal >wage-profit trade-off, while avoiding introducing assumptions on >returns to scale due to the change in the composition of demand. >Alternatively, one could view it as bit of a mess. The observation made me think at first to Frank Hahn. > >>It is a model of determination of (re)production prices, "after the >>harvest", and before the market, allowing for the reproduction of the >>inputs and respecting a given distribitutive rule. >> >>With no hypothesis about returns. > >Yes, but you must admit this is an extremely artificial construction. It is a snapshot. >Again, it is half an equilibrium system because the surplus is >undistributed: it has been produced, but not yet shipped from the >factory gates. Who knows what will happen next? It is simply the derivation of prices acccording to certain rules. You ask: what happens next? Two things: the point is that the scheme on this says NOTHING. And the other point is: what happened BEFORE? Now, you can make it the core of economic theory (a particular position), with prices of production fixed in this way as permanent centers of gravity; you may see them as providing the ideal determination of what would be the PP *if*, etc. You may make this situation the result of valorization process determined by the relationship btw banks and firms in an endogenous money system. > >The system is open. So Sraffa closes the price system with a >distributive rule. That tells us (hypothetically) where the money >goes. My problem really is that it does not explain, amongst other things, from where money comes into the system. >But the net product remains at the factory gates: it remains >undistributed unless the net product is split with another >distributive rule, namely the real distribution of income. Sraffa does >not do this. Yes, but I think that may be one can model a closure on the side of real distribution of income. > >>We should also distinguishing static/dynamic (making formally >>explicit time) and stationary, quantitative growth/evolutionary, >>qualitative development. >> >>Whatever the formal tools. > >It seems to me that Sraffa did attempt to say something about >*changes* in the distribution of income with *simultaneous* equations. Where? To my memory, very little, and mainly to be used as criticism against Neoclassicals. But may be I am wrong here. > >>What do you mean by "novel event"? > >The production of a undistributed surplus. The event is novel because >the surplus is not part of the cost structure of the current period. Yes: it is a surplus. >What happens to the surplus is not fully specified. It does not have to, with HIS problem. >So the novel event >remains unfinished business: like Wiley Coyote who runs off the edge >of a cliff. What happens next? Without causal laws, which are lacking >in Sraffa, no-one can say. Is this a limit of Sraffa? My problem may be iks the opposite, that I do not like the usual ways in which his model is used. His model is after the harvest and before (actual) market. *We* have to construct a theory including what happens during and before the harvest, and on the market. I am not so sure that it will contradict the very few, but precise, statements by Sraffa in his own setting. riccardo
This archive was generated by hypermail 2.1.5 : Sat Mar 31 2007 - 01:00:12 EDT