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A Note on Reswitching and Intertemporal Prices

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  • Saverio M. Fratini

Abstract

Bliss ( Capital Theory and Distribution of Income , Amsterdam/New York: North-Holland/Elsevier) claims that reswitching is nothing but an 'optical illusion' due to the exclusion of non-stationary price sequences from the analysis. This note develops this point. The standard case for choice of techniques and reswitching is reformulated in terms of Arrow-Debreu intertemporal prices and the conditions making these prices stationary are highlighted separately. It is then shown that the analysis of the choice of techniques in terms of 'switch points' requires stationary conditions.

Suggested Citation

  • Saverio M. Fratini, 2015. "A Note on Reswitching and Intertemporal Prices," Review of Political Economy, Taylor & Francis Journals, vol. 27(4), pages 666-678, October.
    • Handle: RePEc:taf:revpoe:v:27:y:2015:i:4:p:666-678
    DOI: 10.1080/09538259.2015.1090762
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    References listed on IDEAS

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    1. Bliss, C. J., 1975. "Capital Theory and the Distribution of Income," Elsevier Monographs, Elsevier, edition 1, number 9780720436044 edited by Bliss, C. J..
    2. Pierangelo Garegnani, 2005. "Capital And Intertemporal Equilibria: A Reply To Mandler," Metroeconomica, Wiley Blackwell, vol. 56(4), pages 411-437, November.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    4. Saverio M. Fratini, 2013. "Real W icksell Effect, Demand for Capital and Stability," Metroeconomica, Wiley Blackwell, vol. 64(2), pages 346-360, May.
    5. Burmeister,Edwin, 1980. "Capital Theory and Dynamics," Cambridge Books, Cambridge University Press, number 9780521297035, October.
    6. Bertram Schefold, 2005. "Reswitching As A Cause Of Instability Of Intertemporal Equilibrium," Metroeconomica, Wiley Blackwell, vol. 56(4), pages 438-476, November.
    7. Saverio M. Fratini, 2007. "Reswitching of Techniques in an Intertemporal Equilibrium Model with Overlapping Generations," Contributions to Political Economy, Cambridge Political Economy Society, vol. 26(1), pages 43-59.
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    Cited by:

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    2. 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.
    3. Stefano Di Bucchianico, 2021. "Negative Interest Rate Policy to Fight Secular Stagnation: Unfeasible, Ineffective, Irrelevant, or Inadequate?," Review of Political Economy, Taylor & Francis Journals, vol. 33(4), pages 687-710, October.

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    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory

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