The equations unveiled: Sraffa's price equations in the making

In the first part of Production of Commodities by Means of Commodities,four equation systems are introduced: three are drawn up inorder to solve the problem of relative prices; the last oneis devised to define a suitable standard of prices. The bookwas published in 1960, but—as we are told in the preface—its‘central propositions’ and a first version of theprice equations had been originally conceived and written morethan 30 years before, when the author was still in his twenties.Having access now to the Sraffa Papers, preserved in the WrenLibrary, we can ascertain the intellectual origin of the equations.In this paper the analytical path that led to the final draftof the price equation is followed, step by step, and the linkbetween these equations and Sraffa's quest for an ‘invariablestandard of value’ is clarified.     

Money, cycles and capital formation: von Mises the 'Austrian' vs. Robertson the 'Dynamist'

A ‘disequilibrium’ between saving and investmentdecisions determines a maladjustment in production, the disruptionof capital, and a downturn in economic activity, according tothe ‘Austrian’ approach. By contrast, the ‘Dynamists’argue that it may lead to economic growth, as disequilibriummay well be instrumental to capital accumulation. What explainsthese different predictions in otherwise similar models? Thekey is in the interplay between the analytical features andthe ideological options underlying each of these approaches:alternative lines of thought, entirely compatible with theiranalytical models, were abandoned by some of these authors whenthey conflicted with their pre-analytical views. This paperillustrates the argument by exploring the models of two ‘fathers’,von Mises and Robertson.     

From simplistic to complex systems in economics

The applicability of complex systems theory in economics isevaluated and compared with standard approaches to economictheorising based upon constrained optimisation. A complex systemis defined in the economic context and differentiated from complexsystems in physio-chemical and biological settings. It is explainedwhy it is necessary to approach economic analysis from a network,rather than a production and utility function perspective, whenwe are dealing with complex systems. It is argued that muchof heterodox thought, particularly in neo-Schumpeterian andneo-Austrian evolutionary economics, can be placed within acomplex systems perspective upon the economy. The challengeis to replace prevailing ‘simplistic’ theories,based in constrained optimisation, with ‘simple’theories, derived from network representations in which valueis created through the establishment of new connections betweenelements.