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On the empirical regularities of Sraffa prices

Anwar Shaikh (), José Alejandro Coronado and Luiza Nassif-Pires
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José Alejandro Coronado: Institute of Innovation and Public Purpose, University College London, UK
Luiza Nassif-Pires: Levy Economics Institute of Bard College, Annandale-on-Hudson, NY, USA

Authors registered in the RePEc Author Service: Luiza Nassif Pires ()

European Journal of Economics and Economic Policies: Intervention, 2020, vol. 17, issue 2, 265-275

Abstract: This paper focuses on a key concern of the Cambridge capital controversies: Sraffa's theoretical demonstration that competitive relative prices, and hence the money value of aggregate capital, can vary in complex ways as the wage share (profit rate) changes. We find that, on the contrary, individual prices are usually linear or mildly curved. We develop a formal measure of curvature, and find that average price curvature does not fall with matrix size as proposed in Brody's random matrix hypothesis. Since the average curves are near-linear, it follows that aggregates such as capital, wages, and net output will exhibit the same behavior. We believe this explains the widely observed near-linearity of the wage–profit curve.

Keywords: Sraffa; prices; production functions; input-output; wage-profit curves; labor theory of value (search for similar items in EconPapers)
JEL-codes: B15 C67 D46 D64 P16 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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