[OPE-L:1512] Testing LVT with I/O by Paul, Allin and G J Michaelson

Iwao Kitamura (ikita@st.rim.or.jp)
Mon, 18 Mar 1996 07:18:28 -0800

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Paul C:
>On the web page:
>I have posted a link to the Capital and Class article under
>the title 'testing labour value theory with input output tables'.
>That should answer some of your questions. In addition, the
>reply I have written to Andrew under the heading "Notes on DYnamic
>Value" touches on the matter. I have also placed on line a
>specific treatment of the determinants of the long term
>movement of the rate of profit under the heading:
>'The declining rate of profit and technical change'.

I have just finished reading the paper 'Testing Labour Value Theory
with input/output tables' by Paul, Allin and GJ Michaelson.
I'm interested in this good empirical work.
I beg Paul and Allin to clarify some miscelaneous and technical points
I don't fully understand.

1. How did you handle depreciation of fixed capital at tesing proportion
-ality of value/price? If depreciation is counted as input, I think we
have to calculate labour content vector as follows under assumption of
simultaneous determination;
where A: ordinary input/output coefficient matrix
B: fixed capital(stock)/output coefficient matrix
D: diagnostic matrix of depreciation rate
v: labour content row vector
L: labour time
(employed income/hourly wage in the paper)
Was your method similar to the above?

2. How did you handle indirect tax/subvention at testing proportionality of
price/value? There must be several sectors among 100? sectors
where indirect tax is the most major factor of price determination.

3. Why didn't you choice testing the proportionality of money expression of
net value added and labour hours? I think it easier to test the relationship
between price and value by this.

About the content, I will consider more and respond.

in OPE solidarity,


Iwao Kitamura
E-mail: ikita@st.rim.or.jp