IDEAS home Printed from https://ideas.repec.org/a/bla/metroe/v60y2009i1p54-76.html
   My bibliography  Save this article

An Obtrusive Remark On Capital And Comparative Statics

Author

Listed:
  • Gaetano Bloise
  • Pietro Reichlin

Abstract

We present a simple comparative statics analysis of steady‐state equilibria in overlapping generations economies with capital accumulation. We regard comparative statics as paradoxical whenever an exogenous increase in saving propensity induces a decrease (an increase) in consumption at the steady state when interest rate is positive (negative). It is shown that there is an exact relation between paradoxical comparative statics and a perverse intersection of properly identified curves of demand for and supply of capital in value. The demand curve for capital in value coincides with that of neo‐Ricardian analysis. We relate our conclusions to some old and recent issues in capital theory.

Suggested Citation

  • Gaetano Bloise & Pietro Reichlin, 2009. "An Obtrusive Remark On Capital And Comparative Statics," Metroeconomica, Wiley Blackwell, vol. 60(1), pages 54-76, February.
    • Handle: RePEc:bla:metroe:v:60:y:2009:i:1:p:54-76
    DOI: 10.1111/j.1467-999X.2008.00318.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-999X.2008.00318.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-999X.2008.00318.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hirota, Masayoshi, 1979. "Capital Deepening Response and Heterogeneity of Capital Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 325-339, June.
    2. Burmeister,Edwin, 1980. "Capital Theory and Dynamics," Cambridge Books, Cambridge University Press, number 9780521297035, November.
    3. Robert A. Becker, 1985. "Comparative Dynamics in Aggregate Models of Optimal Capital Accumulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(4), pages 1235-1256.
    4. Amir, Rabah, 1996. "Sensitivity analysis of multisector optimal economic dynamics," Journal of Mathematical Economics, Elsevier, vol. 25(1), pages 123-141.
    5. Saverio M. Fratini, 2008. "Alcune osservazioni sulla forma delle curve di domanda e offerta di capitale," Departmental Working Papers of Economics - University 'Roma Tre' 0096, Department of Economics - University Roma Tre, revised 2008.
    6. Burmeister, Edwin & Turnovsky, Stephen J, 1972. "Capital Deepening Response in an Economy with Heterogeneous Capital Goods," American Economic Review, American Economic Association, vol. 62(5), pages 842-853, December.
    7. Heinz Kurz & Neri Salvadori, 1998. "Reverse Capital Deepening and the Numeraire: a note," Review of Political Economy, Taylor & Francis Journals, vol. 10(4), pages 415-426.
    8. Pierangelo Garegnani, 2024. "Heterogeneous Capital, the Production Function and the Theory of Distribution," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 147-193, Springer.
    9. Potestio, Paola, 1999. "The aggregate neoclassical theory of distribution and the concept of a given value of capital: towards a more general critique," Structural Change and Economic Dynamics, Elsevier, vol. 10(3-4), pages 381-394, December.
    10. Galor, Oded, 1992. "A Two-Sector Overlapping-Generations Model: A Global Characterization of the Dynamical System," Econometrica, Econometric Society, vol. 60(6), pages 1351-1386, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saverio M. Fratini, 2019. "Neoclassical theories of stationary relative prices and the supply of capital," Metroeconomica, Wiley Blackwell, vol. 70(4), pages 723-737, November.
    2. Fabio Petri, 2021. "None so deaf as those that will not hear: on Garegnani’s contributions to the capital-theoretic critique and the resistances to accepting them," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(2), pages 187-207, December.
    3. Saverio M. Fratini, 2019. "On The Second Stage Of The Cambridge Capital Controversy," Journal of Economic Surveys, Wiley Blackwell, vol. 33(4), pages 1073-1093, September.
    4. Fabio Petri, 2022. "General equilibrium and the neo‐Ricardian critique: On Bloise and Reichlin," Metroeconomica, Wiley Blackwell, vol. 73(4), pages 1021-1047, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Saverio M. Fratini, 2013. "Malinvaud on Wicksell’s Legacy to Capital Theory: Some Critical Remarks," Palgrave Macmillan Books, in: Enrico Sergio Levrero & Antonella Palumbo & Antonella Stirati (ed.), Sraffa and the Reconstruction of Economic Theory: Volume One, chapter 5, pages 105-128, Palgrave Macmillan.
    2. Ariel Dvoskin & Fabio Petri, 2015. "Again on the relevance of reverse capital deepening and reswitching," Department of Economics University of Siena 710, Department of Economics, University of Siena.
    3. Ariel Dvoskin & Fabio Petri, 2017. "Again on the Relevance of Reverse Capital Deepening and Reswitching," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 625-659, November.
    4. Kazuhiro Kurose & Naoki Yoshihara, 2016. "The Heckscher-Ohlin-Samuelson Model and the Cambridge Capital Controversies," DSSR Discussion Papers 58, Graduate School of Economics and Management, Tohoku University.
    5. Saverio M. Fratini, 2010. "Reswitching And Decreasing Demand For Capital," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 676-682, November.
    6. Kazuhiro Kurose & Naoki Yoshihara, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Working Papers SDES-2018-17, Kochi University of Technology, School of Economics and Management, revised Nov 2018.
    7. Kurz, Heinz D. & Salvadori, Neri, 2001. "The aggregate neoclassical theory of distribution and the concept of a given value of capital: a reply," Structural Change and Economic Dynamics, Elsevier, vol. 12(4), pages 479-485, December.
    8. Harvey Gram, 2003. "Joan Robinson: classical revivalist or neoclassical critic?," Review of Political Economy, Taylor & Francis Journals, vol. 15(4), pages 493-508.
    9. KUROSE, Kazuhiro, 2015. "The Structure of the Models of Structural Change and Kaldor's Facts: A Critical Survey," CCES Discussion Paper Series 59, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    10. Vienneau, Robert L., 2019. "Structural economic dynamics, markups, real Wicksell effects, and the reverse substitution of labor," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 216-226.
    11. Fabio Petri, 2022. "General equilibrium and the neo‐Ricardian critique: On Bloise and Reichlin," Metroeconomica, Wiley Blackwell, vol. 73(4), pages 1021-1047, November.
    12. Vienneau, Robert L., 2021. "Fluke Switch Points in Pure Fixed Capital Systems," Centro Sraffa Working Papers CSWP48, Centro di Ricerche e Documentazione "Piero Sraffa".
    13. Edwin Burmeister, 2008. "Equal Organic Composition Of Capital And Regularity," Metroeconomica, Wiley Blackwell, vol. 59(3), pages 323-346, July.
    14. Saverio M. Fratini, 2009. "Reswitching and Decreasing Demand for Capital in a Model with a Continuum of Linear Techniques," EERI Research Paper Series EERI_RP_2009_26, Economics and Econometrics Research Institute (EERI), Brussels.
    15. Kurose, Kazuhiro & Yoshihara, Naoki, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Discussion Paper Series 686, Institute of Economic Research, Hitotsubashi University.
    16. Cavalieri, Duccio, 2013. "Towards a revision of the theory of capital," MPRA Paper 47351, University Library of Munich, Germany.
    17. Zhigang Feng & Matthew Hoelle, 2017. "Indeterminacy in stochastic overlapping generations models: real effects in the long run," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(2), pages 559-585, February.
    18. Pham, Ngoc-Sang & Pham, Thi Kim Cuong, 2020. "Effects of foreign aid on the recipient country’s economic growth," Journal of Mathematical Economics, Elsevier, vol. 86(C), pages 52-68.
    19. Antoine Le Riche, 2016. "Macroeconomic Volatility and Trade in OLG Economies," Working Papers halshs-01079773, HAL.
    20. Leo Kaas & Philipp Kircher, 2015. "Efficient Firm Dynamics in a Frictional Labor Market," American Economic Review, American Economic Association, vol. 105(10), pages 3030-3060, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:metroe:v:60:y:2009:i:1:p:54-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.