What remains of the Cambridge critique of capital theory, if reswitching and reverse capital deepening are empirically rare and theoretically unlikely?

Bertram Schefold
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Bertram Schefold: Fachbereich Wirtschaftswissenschaften, Johann Wolfgang Goethe-Universität, Frankfurt am Main, Germany

European Journal of Economics and Economic Policies: Intervention, 2020, vol. 17, issue 2, 220-240

Abstract: The paper summarises the main results of the Cambridge controversy on capital theory and discusses its actual relevance. The paradoxes that had first been regarded as most relevant (reswitching and reverse capital deepening) have turned out to be empirically rare, and this can be explained theoretically, but both neoclassical and anti-neoclassical Wicksell effects are ubiquitous. The number of efficient techniques that turn up on the envelope of the wage curves of a spectrum of techniques can be shown to be quite small both empirically and theoretically, which constitutes a new critique. It has implications for employment policies.

Keywords: capital theory; production function; reswitching; Sraffa; employment (search for similar items in EconPapers)
JEL-codes: B24 C62 C67 D57 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:17:y:2020:i:2:p220-240

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