Re: naive question on Sraffian model

From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Tue Nov 23 2004 - 13:13:47 EST


At 9:30 -0800 23-11-2004, Ian Wright wrote:
>According to Pasinetti's "lectures on the theory of production" the
>paradigmatic Sraffian model  has either an exogenous wage rate or
>profit rate parameter. Choosing one determines the other, and fixes
>relative prices. Hence, prices reflect the distribution of the surplus
>between wages and profits. Assuming this to be a correct
>characterisation, I'd be grateful if anyone could tell me of attempts
>to "close" this model, in the sense of allowing wages, or profits, or
>both, to be endogenously determined (rather than assuming that wages
>or profits are determined by non-economic factors and hence not a
>subject of economic analysis). My apologies if this is a hopelessly
>naive question. Any help appreciated.
>
>-Ian.

Hi Ian.

The representation is fair.

Actually Sraffa himself closes the model, or at least suggest a
closure, with the interest rate fixed by Central Bank (and the
banking system), which fixes the rate of profit and then the wage.
This is not endogenous determination, I guess, but it is an economic
factor.

Remember that Sraffa didn't wanted a mechanical representation of the
distribution: subsistence wage, or the like.

In Italy somebody has used Kaldor's growth rate to close the model.
The growth rate fixes again the rate of profit, and then the wage
rate. In economic policy terms, this may give a kind of menu.

In Italy, again, somebody proposed a conflictual determination of the wage.

Unfortunately, I have no bibliographical references at hand in
English now, except Sraffa's ( 44), but I guess that you may find
something if you look at journals near the surplus approach or their
books.

riccardo
--
Riccardo Bellofiore
Dipartimento di Scienze Economiche
"Hyman P. Minsky"
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