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From Multipliers to the Distribution of Income: Connecting Leontief and Sraffa

Albert E. Steenge ()
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Albert E. Steenge: University of Groningen

Chapter Chapter 12 in A Reflection on Sraffa’s Revolution in Economic Theory, 2021, pp 361-389 from Palgrave Macmillan

Abstract: Abstract The aim of this chapter is to contribute to our understanding of the relation between Leontief-based and Sraffa-based modelling. To this end we take a second look at the core properties of models belonging to either of these ‘schools’. We focus on the well-known open static Leontief model with one primary factor, and explore how this model behaves if we replace the traditional input coefficients matrix by a matrix of extended input coefficients that capture the real pay accruing to the wage earners. We show that capital can be straightforwardly introduced, and that this model generates a precise expression for the relation between the rate of profits and the wage rate. We finish by discussing the connections between this ‘extended’ Leontief model and Sraffa’s single product models.

Keywords: Input-output model; Extended input coefficients; Distribution of income; Duality (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-3-030-47206-1_12

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