[OPE-L:8593] Re: Re: Re: RE: long term centers of gravity?

From: rakeshb@stanford.edu
Date: Wed Mar 12 2003 - 15:56:51 EST

Quoting Gil Skillman <gskillman@wesleyan.edu>:

> Rakesh writes, among other things:
> >In fact it's impossible that viable technical change will result in
> >FROP if one assumes that input=output prices.
> For what it's worth, that's not true. 

Dear Gil,
I appreciate your correction. I regretted the line soon after I sent the 
post. I had forgotten Shaikh's argument; I did not know of yours. My 
statement is, at any rate, a gross distortion.

 FROP may also emerge under 
> alternative mechanisms of price determination consistent with 
> steady-state condition that equates input and output prices.  For
> example, 
> if you abandon the auction-style Walrasian model of equilibrium 
> determination for one based on a certain form of sequential 
> (more 
> relevant for the analysis of labor markets, if you ask me), then a
> FROP can 
> be shown to emerge in equilibrium without any differentiation 
> input 
> and output prices.  If interested, see my October 1997 
> article demonstrating this.  It generalizes and provides a
> microfoundation 
> for earlier results by Foley and Laibman, who both in effect 
> that 
> the wage share of net product is invariant to technical change.
> Gil

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