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Sraffa and the Reconstruction of Economic Theory: Volume One Theories of Value and Distribution Sraffa and the Reconstruction of Economic Theory: Volume One Theories of Value and Distribution Edited by Enrico Sergio Levrero Antonella Palumbo and Antonella Stirati Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati Contents List of Tables and Figures vii Preface x Acknowledgements xii List of Contributors xiii Introduction 1 Enrico Sergio Levrero Part I The Capital Controversy and General Equilibrium Analysis 1 On the Present State of the Capital Controversy 15 Pierangelo Garegnani 2 Two Strands of Thought in Pierangelo Garegnani’s Capital Theory Critique 38 Harvey Gram 3 Only a Few Techniques Matter! On the Number of Curves on the Wage Frontier 46 Bertram Schefold 4 On the Stability of the Ramsey Accumulation Path 70 Enrico Bellino 5 Malinvaud on Wicksell’s Legacy to Capital Theory: Some Critical Remarks 105 Saverio M. Fratini 6 Capital and Stationary States: Considerations on the Reasons Adduced for Abandoning the Method of Normal Positions 129 Paolo Trabucchi Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright Part II The Revival and Development of the Classical Theory of Distribution 7 Marx’s Theory of Wages and the Revival of the Surplus Approach 153 Enrico Sergio Levrero v 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati vi Contents 8 On Advanced Capitalism and the Determinants of the Change in Income Distribution: A Classical Interpretation 176 Massimo Pivetti 9 Alternative ‘Closures’ to Sraffa’s System: Some Reflections in the Light of the Changes in Functional Income Distribution in the United States 192 Antonella Stirati 10 Sraffa and Keynes: Two Ways of Making a ‘Revolution’ in Economic Theory 218 Guglielmo Chiodi and Leonardo Ditta 11 Causality and Structure in Piecemeal Macroeconomic Modelling 241 Sergio Parrinello 12 On the Link between Functional and Personal Distribution in Italy 260 Aldo Barba 13 Exchange Rate Policy, Distributive Conflict and Structural Heterogeneity: The Argentinean and Brazilian Cases 284 Fabián Amico and Alejandro Fiorito Index 309 Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati List of Tables and Figures Tables 8.1 Factors that have weakened wage earners’ bargaining power since the early 1980s 181 11.1 Over-determination differently resolved 243 12.1 Shares in household disposable income 263 12.2 Shares in wage bill 264 12.3 Factor shares 267 12.4 Gini indexes of each source and total Gini (zero-income subject included) 268 12.5 Pseudo-Gini indexes of each source (zero-income subject included) 269 12.6 Factor source and inequality effects 271 12.7 Factor sources by quintiles (percentage shares in disposable income) 276 12.8 Elasticity of the Gini index with respect to the various income sources 277 13.1 Brazil: inflation targeting, 1999–2008 293 13.2 Argentina and Brazil: GDP growth, 2000–2009 303 Figures 3.1 The choice of technique (Joan Robinson case) 47 3.2 The choice of technique (Paul Samuelson case) 47 3.3 Paradox of capital 48 3.4 The lens composed of straight wage curves between - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright two concave envelopes 62 3.5 Possible domination of ‘earlier’ switch points by ‘later’ wage curves 65 4.1 Net product, f(k) − mk, and its derivative, f ′(k) − m 76 4.2 Phase portrait of the Cass-Koopmans-Ramsey model 78 vii 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati viii List of Tables and Figures 4.3 Curves gkt (kt+1) 88 4.4 Curve h(kt+1) 89 4.5 Case 1(a): (1 – m)kt + f(kt) < kg 91 4.6 Case 1(b): kg < (1 – m)kt + f(kt) 92 4.7 Case 1(c): kg = (1 – m)kt + f(kt) 93 4.8 Lemma 1, item 2 94 4.9 Lemma 1, item 3 95 • ∞ 4.10 Sequence {k t }tϭ1 97 5.1 Wage-interest curves 123 7.1 Some factors affecting the workers’ bargaining position 159 7.2 The case of mechanization of production 164 7.3 The price inflation for any given initial wage share 169 8.1 Network of interconnections formed by factors in Table 8.1 and wage earners’ bargaining power 181 9.1 Adjusted wage share as a percentage of GDP at factor costs 193 9.2 Ratio of net capital stock to GDP 194 9.3 Hourly wage level of production and non-supervisory workers in the US private sector, 1964–2012 194 9.4 Nominal and real long-term interest rates, USA 1960–2011 205 9.5 Wage share in the economy and in manufacturing, USA 1960–2011 206 9.6 Gross operating surplus and mixed incomes as a percentage of value added at factor costs, 1987–2009 207 9.7 Gross operating surplus and mixed incomes as a proportion of value added, 1987–2009 208 9.8 Net returns on net capital stock, US total economy, 1960–2012 209 Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright 9.9 Intermediate inputs as a percentage of value added, current prices, 1987–2009 209 9.10 Nominal and real hourly wages of production and non-supervisory workers in the private sector, 1965–2012, percentage annual rate of change 211 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati List of Tables and Figures ix 9.11 Unemployment rate, USA total, 1960–2010 211 12.1 Functional income distribution versus personal income distribution 262 12.2 Pseudo-Lorenz curve of wage income 270 12.3 Pseudo-Lorenz curve of pensions and other transfers 270 13.1 Argentina: real interest rate, 1997–2009 289 13.2 International food price index, 1999–2009 290 13.3 Argentina: annual wage negotiations by labour unions, 2003–08 291 13.4 Argentina: nominal wages index and unemployment rate, 1997–2009 291 13.5 Brazil: real interest rate, 1990–2010 294 13.6 Argentina and Brazil: nominal exchange rates, 1990–2008 302 13.7 Argentina and Brazil: effective real exchange rates, 1998–2009 302 13.8 Argentina and Brazil: annual inflation rates, 1996–2009 303 13.9 Brazil: wage share, 1990–2008, percentage of national income 304 13.10 Argentina: wage share, 1993–2008, percentage of national income 304 Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati List of Contributors Fabián Amico, Luján University, Buenos Aires Aldo Barba, ‘Federico II’ University of Naples Enrico Bellino, Università Cattolica, Milan Guglielmo Chiodi, Sapienza University of Rome Leonardo Ditta, University of Perugia Alejandro Fiorito, Luján University, Buenos Aires Saverio M. Fratini, Roma Tre University Pierangelo Garegnani, Roma Tre University Harvey Gram, Queens College, City University of New York Enrico Sergio Levrero, Roma Tre University Sergio Parrinello, Sapienza University of Rome Massimo Pivetti, Sapienza University of Rome Bertram Schefold, FB, Wirtschaftswissenschaften, J.W. Goethe-Universität, Frankfurt am Main Antonella Stirati, Roma Tre University Paolo Trabucchi, Roma Tre University Copyright material from www.palgraveconnect.com - licensed to University of Sydney - PalgraveConnect - 2014-01-27 - PalgraveConnect of Sydney - licensed to University www.palgraveconnect.com material from Copyright xiii 10.1057/9781137316837 - Sraffa and the Reconstruction of Economic Theory: Volume One, Edited by Enrico Sergio Levrero, Antonella Palumbo and Antonella Stirati Introduction Enrico Sergio Levrero It is widely recognised that Sraffa’s Production of Commodities by Means of Commodities (PCMC) is not simply a variant of a class of linear models, nor an incomplete general equilibrium model with stationary prices. Together with Sraffa’s 1951 ‘Introduction’ to Ricardo’s Works, Sraffa (1960) revived the old classical economists’ approach to value and dis- tribution, proving that a correct price theory can spring from within that approach, and illustrating properties of the price system and of the choice of techniques which have resulted in a sharp contrast with the foundations of neoclassical (or marginalist) theory. These two aspects of Sraffa’s work have been taken up and further developed in the 50 years following the publication of PCMC, thus trac- ing a path for the development of economic theory along lines different from those that have prevailed since the end of the nineteenth century with the rise to dominance of the neoclassical approach. On the criti- cal side, logical difficulties inherent in the lack of a notion of ‘capital’ generally consistent with the working of this approach, and the para- doxical results originating from that lack, undermined the determina- tion of the wage and profit rates as the result of the relative scarcity of the factors of production (see for example Garegnani, 1960 and 1990; Pasinetti, 1966; Harcourt, 1972; Petri, 2004).
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