Does the Market Adopt Sraffa's "Self -replacing" Prices?
AbstractPiero Sraffa's model of production for subsistence concerns the existence of unique exchange ratios which allow production to be repeated over time. In this paper we investigate the question whether a competitive market adopts these exchange ratios - a question Sraffa alluded to, but did not answer in his book. To this end we restrict our attention to the simple two-commodity case and "translate" Sraffa's model in terms of the Edgeworth box diagram. When outputs are given and only one method of production is known in each industry, it is very easy to show that nothing prevents the market from adopting the "self-replacing" relative price. The introduction of a variety of methods makes things more complex and requires, special cases aside, to consider the outputs as variables to be determined within the model. It is shown that, with constant returns to scale and smooth isoquants in the two industries, the market does indeed adopt Sraffa's self-replacing price.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Società editrice il Mulino in its journal Economia politica.
Volume (Year): (2006)
Issue (Month): 1 ()
Contact details of provider:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.