Constant returns to scale and economic theories of value

Nadeem Naqvi

MPRA Paper from University Library of Munich, Germany

Abstract: Jointly with Erkko Etula, Paul Samuelson [2006] claims that the “Leontief – Sraffa matrix equations for input/output must obey constant returns to scale”. However, in an unrelated work, Amartya Sen [2003] claims that Sraffa’s [1960] “analysis does not need any assumption of constant returns to scale.” In fact, Sraffa’s model cannot satisfy this property because it is impossible to define constant returns to scale in it. This claim is considerably stronger than Sen’s. The property of constant returns to scale is significant because it constitutes a line of demarcation between distinct, though interrelated, economic theories of value. (96 words)

Keywords: Constant returns to scale; Theory of Value; Relations of production; Counterfactual information; Exchange Values; Classical Political Economy; Neoclassical theory; Leontief technology (search for similar items in EconPapers)
JEL-codes: B00 B40 D51 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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