Abstract
This article deals with the revival of the classical theory of value and distribution, championed by Piero Sraffa. The general rate of profits and relative prices are shown to be determined exclusively in terms of the given system of production and real wages (or the share of wages). Prices generally depend on income distribution. So does the cost-minimizing technique. The ‘quantity of capital’ cannot be ascertained independently of prices and thus the rate of profits. Techniques cannot generally be ordered monotonically with the rate of profits. Marginalist ideas regarding input proportions and input prices therefore cannot generally be sustained.
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Kurz, H.D., Salvadori, N. (2018). Neo-ricardian Economics. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2787
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2787
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