Competitive Equilibrium and the Wage-Profit Frontier

Eiji Hosoda

The Manchester School of Economic & Social Studies, 1989, vol. 57, issue 3, 262-79

Abstract: The wage-profit frontier is commonly used when the choice of technique is discussed. Though quite a few economists have explained why a point on the frontier is being chosen, the author has not found their explanations persuasive. He shows that the choice of technique, in terms of the wage-profit frontier, is characterized by the long-run competitive equilibrium as expressed by the von Neumann-Morishima formulation. Thus, a quantity system, as well as a price system, is fully taken into account. The author also explores how a Pasinetti equilibrium switches to an anti-Pasinetti equilibrium as the rate of profit changes. To the best of his knowledge, this switch has not been studied in a multisectoral model thus far. Copyright 1989 by Blackwell Publishers Ltd and The Victoria University of Manchester

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:bla:manch2:v:57:y:1989:i:3:p:262-79

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