 Prices and Distribution in a Sraffian Credit EconomyReview of Political Economy, 1998, vol. 10, issue 4, 399-413 Abstract: Sraffa's suggestion regarding the monetary determination of the rate of profits raises two fundamental questions addressed by this paper: (i) can the money rates of interest be envisaged as variables set by the financial system independently of the real sector of the economy? (ii) How can they determine the general rate of profits and so allow for the determination of natural prices and income distribution? To elaborate on the intuition that the competitive process must link the rate of profits earned in the financial sector (and ruled by the intermediaries' margin) to that earned in the production sector, a long-period credit economy is constructed. Unlike previous attempts, the system of equations describing such an economy leaves Sraffa's (1960) original price equations unaffected. If certain fairly unrestrictive conditions are met, the solution of this system is shown to exist and to be economically meaningful, hence supporting Sraffa's hint that the rates of interest are free to determine the rate of profits outside of the system of production. Date: 1998 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:revpoe:v:10:y:1998:i:4:p:399-413 Ordering information: This journal article can be ordered from DOI: 10.1080/09538259800000060 Access Statistics for this article Review of Political Economy is currently edited by Steve Pressman and Louis-Philippe Rochon More articles in Review of Political Economy from Taylor & Francis Journals |
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