An empirically sufficient form for Sraffa prices

This paper examines three propositions: Sraffa's comment that Marx was “of course” right in thinking that labor value and “Sraffa price” (prices expressed relative to Sraffa's standard commodity) aggregates are essentially the same: empirical deviations of various aggregate components of total output are around five percent. This should be reflected in small representative models. Second, Pasinetti is correct that actual Sraffa price paths are generally simpler than those in the theoretical literature – as confirmed by the 403 industry price curves of the US 2002 input-output matrix. Third, as has been often demonstrated, Marx's transformation procedure is an iterative procedure for deriving Sraffa prices. Bienenfeld derives powerful first and second iterates, each beginning and ending at the corresponding individual Sraffa price curves. The simple nonlinear form of the second iterate provides excellent fits for the 403 Sraffa price curves. It is therefore an empirically sufficient general form of such price curves.