EconPapers    
Economics at your fingertips  
 

Neoclassical theories of stationary relative prices and the supply of capital

Saverio Fratini ()

MPRA Paper from University Library of Munich, Germany

Abstract: In the traditional versions of the neoclassical theory of value and distribution, the stock of existing capital—understood as either an amount of value or an endowment of capital goods—was taken as given, together with the available quantities of labour and natural resources. This characteristic of the early neoclassical theories is analysed by the comparison with the modern neo-Walrasian models of stationary equilibrium, in which the stock of capital is not considered among the data. We show that the attempt to put capital on the same footing as labour and land—i.e. to present it as a factor of production—led the early neoclassical author to write the zero netaccumulation condition, which was required by the stationarity of relative prices, in the form of a market clearing condition between supply of and demand for capital. The rate of interest was then understood as the price to determine by this market. However, as is well known, the conception of capital as a factor of production—and of the rate of interest as the price for its use—did not work and involved several problems, some of which are discussed in this paper.

Keywords: stationary relative prices; capital; net accumulation; Wicksell; Walras (search for similar items in EconPapers)
JEL-codes: B13 B21 D24 D51 D91 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/76343/1/MPRA_paper_76343.pdf original version (application/pdf)

Related works:
Journal Article: Neoclassical theories of stationary relative prices and the supply of capital (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:76343

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2020-08-02
Handle: RePEc:pra:mprapa:76343