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Revisiting fixed capital models in the Sraffa framework

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  • Biao Huang

    (Renmin University of China)

Abstract

Von Neumann (Review of Economics Studies 13(1):1–9, 1945) and Sraffa (Production of commodities by means of commodities. Prelude to a critique of economic theory. Cambridge University Press, Cambridge, 1960) revived the classical ideas of treating fixed capital as a special case of joint production. Sraffa’s model with a single machine that has constant efficiency has been widely generalised. Among such generalisations, Salvadori’s contribution (Value, distribution and capital. Essays in honour of Pierangelo Garegnani, Routledge, London, pp 270–285, 1999) not only re-ignited research interest in the field, but also reshaped scholastic understanding of the importance of machines’ efficiencies with regard to fixed capital models. Such novel insights make it necessary to revisit the development of fixed capital models in the Sraffa framework. In this paper these models are surveyed with a focus on the properties of the cost-minimising technique in each model.

Suggested Citation

  • Biao Huang, 2019. "Revisiting fixed capital models in the Sraffa framework," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(2), pages 351-371, July.
    • Handle: RePEc:spr:epolit:v:36:y:2019:i:2:d:10.1007_s40888-019-00147-7
    DOI: 10.1007/s40888-019-00147-7
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    References listed on IDEAS

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    1. Heinz Kurz & Neri Salvadori, 2005. "Removing an 'insuperable obstacle' in the way of an objectivist analysis: Sraffa's attempts at fixed capital," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 12(3), pages 493-523.
    2. Christian Bidard, 2016. "On Transferable Machines," Metroeconomica, Wiley Blackwell, vol. 67(3), pages 513-528, July.
    3. Fabio Petri, 2004. "General Equilibrium, Capital and Macroeconomics," Books, Edward Elgar Publishing, number 3438.
    4. Fred Moseley, 2011. "Reply to Gehrke," Review of Political Economy, Taylor & Francis Journals, vol. 23(2), pages 307-315, April.
    5. Biao Huang, 2015. "A Fixed Capital Model with Transferable and Jointly Utilized Machines in the Sraffa Framework," Metroeconomica, Wiley Blackwell, vol. 66(3), pages 426-450, July.
    6. Kurz, Heinz D, 1990. "Effective Demand, Employment and Capital Utilisation in the Short Run," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(2), pages 205-217, June.
    7. Christian Lager, 2006. "The Treatment of Fixed Capital in the Long Period," Economic Systems Research, Taylor & Francis Journals, vol. 18(4), pages 411-426.
    8. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676, November.
    9. Kurz, Heinz D. & Salvadori, Neri, 2003. "Fund-flow versus flow-flow in production theory: Reflections on Georgescu-Roegen's contribution," Journal of Economic Behavior & Organization, Elsevier, vol. 51(4), pages 487-505, August.
    10. Salvadori, Neri & Steedman, Ian, 1988. "Joint Production Analysis in a Sraffian Framework," Bulletin of Economic Research, Wiley Blackwell, vol. 40(3), pages 165-195, June.
    11. J. v. Neumann, 1945. "A Model of General Economic Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 13(1), pages 1-9.
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    13. Salvadori, Neri, 1988. "Fixed Capital within a von Neumann-Morishima Model of Growth and Distribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(2), pages 341-351, May.
    14. Christian Lager, 1997. "Treatment of Fixed Capital in the Sraffian Framework and in the Theory of Dynamic Input-Output Models," Economic Systems Research, Taylor & Francis Journals, vol. 9(4), pages 357-374.
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    Cited by:

    1. Vienneau, Robert L., 2021. "Fluke Switch Points in Pure Fixed Capital Systems," Centro Sraffa Working Papers CSWP48, Centro di Ricerche e Documentazione "Piero Sraffa".

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    More about this item

    Keywords

    Fixed capital; Sraffa; Cost-minimising technique; Transferable machines; Jointly utilised machines;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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