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Switching of Techniques

In: Capital Theory, the Surplus Approach, and Effective Demand

Author

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  • Pierangelo Garegnani

    (Roma Tre University)

Abstract

The paper demonstrates the invalidity of Levhari’s attempts to show that it is impossible for a production system that has ceased to be profitable due to a change in the rate of profits, to become profitable again when the profit rate changes further in the same direction. We first point out where Levhari’s argument fails and then show, by means of a numerical example, that such a ‘return’, or ‘switch-back’, of a production system is possible under Levhari’s own assumptions. We will then comment on the origin and implications of the error that the ‘return’ of a system reveals in traditional theory.

Suggested Citation

  • Pierangelo Garegnani, 2024. "Switching of Techniques," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 195-208, Springer.
  • Handle: RePEc:spr:spshcp:978-3-031-23643-3_3
    DOI: 10.1007/978-3-031-23643-3_3
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    Cited by:

    1. Davide Romaniello, 2021. "Note bibliografiche: Stirati A. (2020), Lavoro e salari. Un punto di vista alternativo sulla crisi, Roma: Ed. L’asino d’oro, pp. 279, ISBN:9788864435367," Moneta e Credito, Economia civile, vol. 74(293), pages 87-93.
    2. Carlo Milana, 2024. "Refuting Samuelson’s capitulation on the re-switching of techniques in the Cambridge capital controversy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(2), pages 179-197, June.
    3. Marc Lavoie, 2022. "Pierangelo Garegnani, come lo intesi alla fine degli anni Ottanta (Pierangelo Garegnani, as perceived in the late 1980s)," Moneta e Credito, Economia civile, vol. 75(299), pages 233-249.
    4. Stefano Zambelli, 2014. "Aggregate Production Functions and Neoclassical Properties: An Empirical Verification," ASSRU Discussion Papers 1405, ASSRU - Algorithmic Social Science Research Unit.
    5. Vedit Ä°nal, 2024. "On the Relationship between the Money Rate of Interest and Aggregate Investment Spending," Review of Radical Political Economics, Union for Radical Political Economics, vol. 56(2), pages 300-318, June.
    6. Zambelli, Stefano & Fredholm, Thomas & Venkatachalam, Ragupathy, 2017. "Robust measurement of national technological progress," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 38-55.
    7. Attilio Trezzini, 2018. "Piero Sraffa’s Use of the History of Economic Thought in the Cambridge Lectures," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 189-209, March.
    8. Kurose, Kazuhiro & Yoshihara, Naoki, 2016. "The Heckscher-Ohlin-Samuelson Model and the Cambridge Capital Controversies," UMASS Amherst Economics Working Papers 2016-05, University of Massachusetts Amherst, Department of Economics.
    9. Carlo Milana, 2019. "Solving the Reswitching Paradox in the Sraffian Theory of Capital," Applied Economics and Finance, Redfame publishing, vol. 6(6), pages 97-125, November.
    10. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    11. Matias Vernengo, 2022. "Oltre l'economia eterodossa volgare: una nota sull'eredita' di Pierangelo Garegnani (1930-2011) (Beyond vulgar heterodox economics: a note on the legacy of Pierangelo Garegnani (1930-2011))," Moneta e Credito, Economia civile, vol. 75(299), pages 339-351.
    12. Michael Osborne & Ian Davidson, 2016. "The Cambridge capital controversies: contributions from the complex plane," Review of Political Economy, Taylor & Francis Journals, vol. 28(2), pages 251-269, April.
    13. Giovanni Michelagnoli, 2019. "Federico Caff? on the economic science in Italy," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 8(2), pages 63-83.
    14. Z. M. Berrebi, 1981. "Comparaison de techniques et normes des prix," Revue Économique, Programme National Persée, vol. 32(5), pages 965-970.
    15. 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.
    16. Gary Mongiovi, 2021. "Pierangelo Garegnani and the revival of the ‘submerged and forgotten’ surplus approach," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(2), pages 163-184, December.
    17. Alessandro Morselli, 2024. "Paolo Sylos-Labini’s Contribution to and Affinities for Institutional Economic Thought," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 222-240.
    18. 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.

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