Incomes from Capital in Alternative Economic Theories

Saverio Fratini

No CSWP42, Centro Sraffa Working Papers from Centro di Ricerche e Documentazione "Piero Sraffa"

Abstract: This paper addresses the theoretical explanation of profit and interest within three different approaches: i) classical/Marxian; ii) marginalist; and iii) Arrow-Debreu. In the classical/Marxian approach, incomes from capital are understood as a surplus whose amount depends on the class conflict. In the marginalist theory, the rate of interest is the price firms pay to households for the use of a factor of production named ‘capi-tal’. In the Arrow-Debreu equilibrium theory, interest rates and firm profit are still present, but, as we shall try to show, they can hardly be seen as income from capital.

Keywords: Capital profit; interest. (search for similar items in EconPapers)
JEL-codes: B51 D24 D51 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2020-07-20
New Economics Papers: this item is included in nep-hme, nep-ore and nep-pke
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:sraffa:0042

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