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On the empirical regularities of Sraffa prices

Author

Listed:
  • Anwar Shaikh

    (The New School for Social Research, New York, NY, USA)

  • José Alejandro Coronado

    (Institute of Innovation and Public Purpose, University College London, UK)

  • Luiza Nassif-Pires

    (Levy Economics Institute of Bard College, Annandale-on-Hudson, NY, USA)

Abstract

This paper focuses on a key concern of the Cambridge capital controversies: Sraffa's theoretical demonstration that competitive relative prices, and hence the money value of aggregate capital, can vary in complex ways as the wage share (profit rate) changes. We find that, on the contrary, individual prices are usually linear or mildly curved. We develop a formal measure of curvature, and find that average price curvature does not fall with matrix size as proposed in Brody's random matrix hypothesis. Since the average curves are near-linear, it follows that aggregates such as capital, wages, and net output will exhibit the same behavior. We believe this explains the widely observed near-linearity of the wage–profit curve.

Suggested Citation

  • Anwar Shaikh & José Alejandro Coronado & Luiza Nassif-Pires, 2020. "On the empirical regularities of Sraffa prices," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 17(2), pages 265-275, September.
  • Handle: RePEc:elg:ejeepi:v:17:y:2020:i:2:p265-275
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    Citations

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    Cited by:

    1. Shaikh, Anwar, 2024. "An empirically sufficient form for Sraffa prices," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 1-9.
    2. Schefold, Bertram, 2022. "What Remains of the Cambridge Critique? Potential Conclusions and Directions for Further Research Following from Recent Investigations in Capital Theory," Centro Sraffa Working Papers CSWP53, Centro di Ricerche e Documentazione "Piero Sraffa".
    3. Luis Daniel Torres-González, 2020. "The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves," Working Papers 2016, New School for Social Research, Department of Economics.
    4. Tsoulfidis, Lefteris, 2021. "Capital Theory Debates: New Developments and Direction," Centro Sraffa Working Papers CSWP51, Centro di Ricerche e Documentazione "Piero Sraffa".
    5. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2022. "Computational methods and classical‐Marxian economics," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 310-349, April.
    6. Petri, Fabio, 2021. "What Remains of the Cambridge Critique? On Professor Schefold's Theses," Centro Sraffa Working Papers CSWP50, Centro di Ricerche e Documentazione "Piero Sraffa".
    7. Torres-González, Luis Daniel, 2022. "The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 622-659.
    8. Jacobo Ferrer-Hernández & Luis Daniel Torres-González, 2021. "Eigenvalues and Eigenlabors: On Iliadi’s, Mariolis’, Soklis’, and Tsoulfidis’ Explanation of the Empirical Regularities in Price Curves," Working Papers 2119, New School for Social Research, Department of Economics.
    9. Vallès Codina, Oriol, 2023. "Business cycles, sectoral price stabilization, and climate change mitigation: A model of multi-sector growth in the tradition of the Bielefeld disequilibrium approach," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 636-653.

    More about this item

    Keywords

    Sraffa; prices; production functions; input-output; wage-profit curves; labor theory of value;
    All these keywords.

    JEL classification:

    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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