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Some Recent Developments on the Explanation of the Empirical Relationship between Prices and Distribution

Author

Listed:
  • Ferrer-Hernández , Jacobo

    (New School for Social Research)

  • Torres-González, Luis Daniel

    (Benemérita Universidad Autónoma de Puebla)

Abstract

The paper complemets recent contributions towards the explanation of the regularities in the behaviour of prices and capital intensities as an effect of hypothetical changes in the rate of profit in empirical production-price models. It is shown that theoretical price and capital curvers, i.e. prices and capital values as a function of the rate of profits, depend on the product of the eigenvalues and what we call the eigenlabours - the representation of the labour vector in the space spanned by the eigenvectors of the input matrix. We report robust evidence that the eigenvalues by themselves cannot produce the curves regulary reported in the literature, but rather it is the joint action of the eigenvalues and the eigenlabours. It is conjectured that the tendency towards zero of the subdominant eigenlabours is driven by the statistical tendency towards the proportionally between the labour vector and the Perron-Frobenius eigenvector of the input matrix.

Suggested Citation

  • Ferrer-Hernández , Jacobo & Torres-González, Luis Daniel, 2022. "Some Recent Developments on the Explanation of the Empirical Relationship between Prices and Distribution," Centro Sraffa Working Papers CSWP54, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0054
    as

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    References listed on IDEAS

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    5. Fotoula Iliadi & Theodore Mariolis & George Soklis & Lefteris Tsoulfidis, 2014. "Bienenfeld's Approximation of Production Prices and Eigenvalue Distribution: Further Evidence from Five European Economies," Contributions to Political Economy, Oxford University Press, vol. 33(1), pages 35-54.
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    12. Luis Daniel Torres-González & Jangho Yang, 2019. "The persistent statistical structure of the US input–output coefficient matrices: 1963–2007," Economic Systems Research, Taylor & Francis Journals, vol. 31(4), pages 481-504, October.
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    14. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
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    18. Kersting, Götz & Schefold, Bertram, 2021. "Best techniques leave little room for substitution. A new critique of the production function," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 509-533.
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    More about this item

    Keywords

    Sraffian price models; price-profit rate curves; capital value; spectral representation; labour vector-Perron-Frobenius eigenvector relation;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis

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