[OPE-L:3849] Re: Re: Re: Re: Re: Rational expectations Marxism

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Tue Sep 19 2000 - 02:27:22 EDT

[ show plain text ]

Steve Keen wrote:

> Here's one where I *disagree* with Ajit!
> For a formal statement as to why, you might check my critique of Steedman's
> "Questions for Kaleckians" in ROPE: Answers (and Questions) for Sraffians
> (and Kaleckians)", Review of Political Economy, Vol. 10, No. 1, 73-87.


Steve, I would love to read your piece. Could you send me a copy either through
e-mail or snail mail? My library has just started to get ROPE, so we have only the
last two issues or so. My sense is that your paper came out little earlier.

> For a brief f'ristance of the argument there, one mainstay of static price
> theory is that the sum of any column of the input-output matrix must sum to
> less than one (colloquially; technically, the dominant eigenvalue of the IO
> matrix must be less than one). Steedman uses this to critique Kaleckian
> markup pricing, and it can also be used to rule out any IO matrix which
> breaches that rule since the equilibrium price vector it will generate will
> have negative prices.
> However, in a dynamic context, such a matrix is feasible, since it can
> result in rising prices which will always move away from the negative
> equilibrium vector. Thus what is not feasible in an equilibrium setting is,
> in this instance, quite feasible in a dynamic setting.


My question would be what are you measuring your prices in, and how that measure
remains invariant in the dynamic context. Otherwise you are measuring changes with
a yard stick that itself is changing. Cheers, ajit sinha

> However, this does not constitute any support from me for the TSS approach,
> I might add. I would want to separate out various stages of the dynamic
> process--for instance by distinguishing technical change from the
> underlying IO dynamics initially, and then introducing technical change in
> a logically coherent and, if possible, separate representation.
> Cheers,
> Steve
> At 06:04 PM 9/18/00 +0530, you wrote:
> >
> >
> >clyder wrote:
> >
> >> > Rakesh is right on target here. The Babbage problem is central to the
> >> problem
> >> > associated with Rational Expectations Marxism. In an economy with rapid
> >> tech.
> >> > change, no one can predict what an appropriate value-depreciation should
> >> be.
> >>
> >> Does this not vitiate the whole premise of the formation of a uniform rate
> >> of profit?
> >>
> >> Is the idea of a transformation from values to prices of production still
> >> tenable
> >> if the valuation of fixed capital is indeterminate?
> >
> >____________________
> >
> >I think a theory of prices is essentially a static problem. There cannot be a
> >dynamic theory of prices, particularly when technological change is taken
> into
> >consideration. You simply cannot have any means of consistent measurement.
> >Ricardo did want to have a theory of prices in a dynamic context of technical
> >change. But all the works have shown that this was "will o' the wisp".
> Cheers,
> >ajit sinha
> >
> >
> Dr. Steve Keen
> Senior Lecturer
> Economics & Finance
> University of Western Sydney Macarthur
> Building 11 Room 30,
> Goldsmith Avenue, Campbelltown
> PO Box 555 Campbelltown NSW 2560
> Australia
> s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
> Home 02 9558-8018 Mobile 0409 716 088
> Home Page: http://bus.macarthur.uws.edu.au/steve-keen/

This archive was generated by hypermail 2b29 : Sat Sep 30 2000 - 00:00:05 EDT