Re: [OPE-L] equilibrium and simultaneous vs. sequential determination

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Sep 15 2007 - 10:06:03 EDT

Quoting Ian Wright <wrighti@ACM.ORG>:

> Hi Fred
>> My equations are very simple.  Prices of production are determined by:
>>         PPi =  ki +  rKi
>> with r, ki, and Ki taken as given.
> What is ki and Ki? And what are the units?

ki is a flow variable - the “cost price” of a commodity, i.e. the sum
of the constant capital and variable capital consumed in the production
of the commodity in a given period, as defined in Chapter 1 of Volume 3.

Ki is a stock variable – the total capital advanced at a certain point
in time, i.e. the sum of the stock of constant capital and the stock of
variable capital.  The latter is often considered to be negligibly
small, in which case Ki is simplified to Ci.

Both of these variables are taken as given in the determination of the
price of production of each commodity, as equal to current costs of the

The units are all money.


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