Pure joint production and international trade: a note

This paper applies the principles of the neo-Ricardian (or Sraffian)theory of international trade to certain joint production systems.It is shown that, in contrast with single-product systems, (i)there is not always a pattern of international specialisation,which would entail the increase of the real wage rate in botheconomies, and (ii) the ‘law of comparative advantage’has no general validity. Furthermore, not only the existenceof such a pattern of specialisation but also the validity ofthis law depend on the values of the variables of distributionof income. The analysis is wholly based on two of the numericalexamples formulated by Bidard in 1997, and further generalisedin an elementary way only when this is considered necessary.     

PURE JOINT PRODUCTION,INCOME DISTRIBUTION,EMPLOYMENT AND THE EXCHANGE RATE

This paper deals with an open economy with heterogeneous capital and linear processes of pure joint production from a long‐period perspective. It is shown that: (1) an effective exchange rate change has ambiguous effects on the distribution of income and the competitiveness of domestic output; (2) the matrix of super‐multipliers linking exports to gross output is not always uniquely defined; and (3) the volume of exports and the volume of total employment may be inversely related, even if prices and distribution do not change.     

ON BRÓDY'S CONJECTURE: THEORY,FACTS AND FIGURES ABOUT INSTABILITY OF THE US ECONOMY

Bródy's conjecture regarding the instability of economies is submitted to an empirical test using input–output flow tables of varying size for the US economy, for the benchmark years 1997 and 2002, as well as for the period 1998–2011. The results obtained using input–output tables of various dimensions lend support to the view of increasing instability (in the sense of Bródy) of the US economy over the period considered. Furthermore, our analysis shows that only a few vertically integrated industries are enough to shape the behaviour of the entire economy in the case of a disturbance. These results may usefully be contrasted with those derived in a parallel literature on aggregate fluctuations from microeconomic ‘idiosyncratic’ shocks.     

Decomposing the Changes in Production Prices into "Capital-Intensity" and "Price" Effects: Theory and Evidence from the Chinese Economy

This paper deals with the changes in prices of production inducedby variations in income distribution on the basis of a linearmodel of production with circulating capital and homogeneouslabour. It is shown that the total effect of income distributionon prices can be decomposed into a "capital-intensity" and a"price" effect and that, in actual economies, the former isexpected to dominate the latter. In order to obtain a concreteidea of the actual trajectories of the price movements and toquantify the relative strength of the two effects, we use input–outputdata of the Chinese economy.     

Norm Bounds and A Homographic Approximation for the Wage–Profit Curve

This paper provides lower and upper norm bounds for the wage–profit curve in linear single‐product systems. Thus, it also constructs an algebraically simple (i.e. homographic) and empirically powerful approximation to that curve. The results finally suggest that actual economies tend to behave as ‘corn‐tractor’ systems with respect to the shape of the wage–profit curve and, at the same time, behave as three‐industry systems with respect to the shape of the production price–profit rate curves.     

Falling Rate of Profit and Mass of Profits: A Note

This paper shows that the mass of profits may be strictly increasing even when the rate of profit is strictly decreasing. Thus, a recent ‘long-wave version’ of the falling rate of profit theory of crisis is called into question.     

Testing Böhm-Bawerk’s theory of capital: Some evidence from the Finnish economy

This paper considers the pure labour theory of value and Böhm-Bawerk’s theory of capital as approximations of Sraffa’s model of single production, and tests them with data from the Symmetric Input-output Tables of the Finnish economy. The results show that (i) in comparison with the labour values, the actual Böhm-Bawerkian production prices are ‘equally’ good or even better approximations of the actual Sraffian production prices and market prices; and (ii) the Sraffian production price-profit rate relationship is, by and large, governed by the differences in the Böhm-Bawerkian average periods of production.     

Input–output evidence on the relative price effects of total productivity shift

This paper provides empirical evidence on the relative price effects of a notional shift in total productivity using data from ten Symmetric Input–Output Tables of five European economies. The results suggest that the direction of the price-movements is, more often than not, governed by the (traditional) labour cost condition and this could be connected to the effective ranks of the matrices of the relative shares of the capital goods.     

HETEROGENEOUS CAPITAL GOODS AND THE HARROD–BALASSA–SAMUELSON EFFECT

This paper shows that in a world of ‘production of commodities by means of commodities’ there is not an unambiguous relation between the long‐period relative commodity prices and the sectoral total factor productivities. Consequently, the Harrod–Balassa–Samuelson effect is not verified and/or makes no sense.     

MEASURES OF PRODUCTION PRICE‐LABOUR VALUE DEVIATION AND INCOME DISTRIBUTION IN ACTUAL ECONOMIES: A NOTE

Many empirical studies indicate that the deviations of actual prices of production from labour values are not too sensitive to the type of measure used for their evaluation. This paper attempts to theorize this rather ‘stylized fact’ by focusing on the relationships between the traditional and the numéraire‐free measures of deviation. On the empirical side, it provides an illustration of these relationships using input–output data from the Japanese economy.