The transformation problem under positive rank one input matrices: on a new approach by Schefold

Masashi Morioka ()
Additional contact information
Masashi Morioka: Ritsumeikan University

Evolutionary and Institutional Economics Review, 2019, vol. 16, issue 2, No 3, 303-313

Abstract: Abstract Recently, Schefold proposed a new approach to the transformation problem consisting of two contentions. One is that input matrices of large-scale economies can be approximated by positive rank one matrices. The second is that additional original assumptions about the relationship among input coefficients, labor coefficients, gross outputs, and surplus outputs can establish the equality of the total profits and total surplus value under a numéraire equalizing the total production prices and total value. The purpose of this study is to critically examine the second part of Schefold’s argument. First, we will confirm that it is an attempt to give plausible grounds to a condition that has been known as sufficient for the successful solution of the transformation problem but considered to hold only by chance. Next, we will indicate that, except for a supposition about the rank of input matrices, his key assumptions depend on the measurement units of each product. Because this dependence implies that these assumptions hold only when measurement units fill particular conditions, it naturally casts a serious doubt on the generality of the analysis based on them. While it is possible to combine these assumptions into a unit-independent form, such a reformulation deprives them of the meaning attached to their original form. Thus, in spite of its unique viewpoint, Schefold’s new approach does not succeed in bringing the value system closer to the production price system.

Keywords: Transformation problem; Total profits; Total surplus value; Positive rank one matrix; Measurement units (search for similar items in EconPapers)
JEL-codes: B14 B24 B51 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s40844-019-00144-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:eaiere:v:16:y:2019:i:2:d:10.1007_s40844-019-00144-2

Ordering information: This journal article can be ordered from
https://www.springer ... theory/journal/40844

DOI: 10.1007/s40844-019-00144-2

Access Statistics for this article

Evolutionary and Institutional Economics Review is currently edited by Kiichiro Yagi, Yuji Aruka and Takahiro Fujimoto

More articles in Evolutionary and Institutional Economics Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().