Re: [OPE-L] why does the debate on the "transformation problem" continue?

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Mon Mar 26 2007 - 15:48:00 EDT


On Mon, 26 Mar 2007, Ian Wright wrote:

>> I am trying to find out, if they think our empirical data is wrong,
>> or do they think that even in the absence of a general rate of profit there
>> is
>> still a transformation problem
>
> Uniform profits is a simplifying assumption. The debate on the TP
> could take place with a price of production equation that replaces the
> single r with a diagonal matrix of r's. Uniform profits is not the
> cause of the TP (the mere presence of profits is).

Reposting my question on this:

Ian, could you explain why you think that is the case?

(In a historical sense, Adam Smith believed this; then Ricardo
pointed out why Smith was wrong.  But I don't suppose your grounds
are the same as Smith's.)

--
Allin Cottrell
Department of Economics
Wake Forest University, NC


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