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Equal Organic Composition Of Capital And Regularity

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  • Edwin Burmeister

Abstract

Equal organic composition of capital (EOCC) is shown to be a necessary and sufficient condition for constant relative prices in no‐joint production technologies with neoclassical production functions. It is then proved that such neoclassical technologies are regular (which implies that consumption is well behaved across steady‐state equilibria). Regularity is also a necessary and sufficient condition for near aggregation (which implies an aggregate production function with all but one of the usual neoclassical properties). Except perhaps for some fluke cases, the existence of an aggregate production function with all of the usual neoclassical properties (full aggregation) requires the stronger EOCC property.

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  • Edwin Burmeister, 2008. "Equal Organic Composition Of Capital And Regularity," Metroeconomica, Wiley Blackwell, vol. 59(3), pages 323-346, July.
    • Handle: RePEc:bla:metroe:v:59:y:2008:i:3:p:323-346
    DOI: 10.1111/j.1467-999X.2007.00302.x
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    References listed on IDEAS

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    1. Burmeister, Edwin, 1984. "Sraffa, Labor Theories of Value, and the Economics of Real Wage Rate Determination," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 508-526, June.
    2. Burmeister, Edwin & Turnovsky, Stephen J, 1972. "Capital Deepening Response in an Economy with Heterogeneous Capital Goods," American Economic Review, American Economic Association, vol. 62(5), pages 842-853, December.
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    4. Miyao, Takahiro, 1977. "A Generalization of Sraffa's Standard Commodity and Its Complete Characterization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(1), pages 151-162, February.
    5. Salvadori, Neri & Steedman, Ian, 1988. "No Reswitching? No Switching!," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 12(4), pages 481-486, December.
    6. Wilfried Parys, 1977. "A Simple Criterion for Equal Value Composition of Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(3), pages 511-512.
    7. Hirofumi Uzawa, 1962. "Production Functions with Constant Elasticities of Substitution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 291-299.
    8. Burmeister, Edwin & Hammond, P J, 1977. "Maximin Paths of Heterogeneous Capital Accumulation and the Instability of Paradoxical Steady States," Econometrica, Econometric Society, vol. 45(4), pages 853-870, May.
    9. Burmeister,Edwin, 1980. "Capital Theory and Dynamics," Cambridge Books, Cambridge University Press, number 9780521297035.
    10. Fisher, Franklin M, 1971. "Aggregate Production Functions and the Explanation of Wages: A Simulation Experiment," The Review of Economics and Statistics, MIT Press, vol. 53(4), pages 305-325, November.
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    12. Brown, Murray & Chang, Winston W, 1976. "Capital Aggregation in a General Equilibrium Model of Production," Econometrica, Econometric Society, vol. 44(6), pages 1179-1200, November.
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    1. G. Giorgi & C. Zuccotti, 2012. "On the linearity of the wage–profit relation in a Sraffa’s model: a mathematical summing-up," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 35(1), pages 59-73, May.

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