On the Role of Finance in Sraffa’s System

Ariel Dvoskin () and German Feldman
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Ariel Dvoskin: National University of San Martín

No CSWP37, Centro Sraffa Working Papers from Centro di Ricerche e Documentazione "Piero Sraffa"

Abstract: We critically review the previous attempts to introduce money and finance into Sraffa’s price system, whose main difference is, we argue, their conception of the interest rate, either as an opportunity cost or as an effective cost of production. We examine the implications on three different grounds: (i) the formal consistency of the system; (ii) the possibilities to explicitly treat the financial industry as any other productive sector; and (iii) the validity of the so-called “monetary theory of distribution” (MTD). We then suggest a possible route, inspired by Schumpeter’s ideas on economic development, to introduce the banking sector through its role of granting credit to innovation. Unlike previous contributions, this reformulation allows us both to justify the basic nature of the financial sector and simultaneously preserve the validity of MTD.

Keywords: Banking industry; Innovation; Monetary theory of distribution; Sraffa; Surplus approach. (search for similar items in EconPapers)
JEL-codes: E11 E43 E52 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2019-10-16
New Economics Papers: this item is included in nep-cba, nep-his, nep-hme, nep-hpe, nep-mac, nep-mon and nep-pke
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:sraffa:0037

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