IDEAS home Printed from https://ideas.repec.org/a/eee/mateco/v77y2018icp39-53.html
   My bibliography  Save this article

Profit rates equalization and balanced growth in a multi-sector model of classical competition

Author

Listed:
  • Kiedrowski, Roman

Abstract

The article refers to the old issue of profit rates equalization, originated from the works of Smith and Ricardo. It is devoted to a dynamic, recursive model of classical competition in a growing economy. The economy is composed of n firms (sectors) producing n different goods. Decisions on prices and production are made in each period by firms managers who take production capacities, determined by fixed capital, as given. All firms are owned by one representative capital owner (a capitalist) who decides in each period on his consumption and investment funds and next distributes the investment fund among firms on the basis of their capital profitability differentials. The author presents proof of existence, uniqueness and stability of a long-run classical equilibrium, which is equivalent to a balanced, long-run growth of fixed capital, output and consumption with equal profit rates and zero inventories.

Suggested Citation

  • Kiedrowski, Roman, 2018. "Profit rates equalization and balanced growth in a multi-sector model of classical competition," Journal of Mathematical Economics, Elsevier, vol. 77(C), pages 39-53.
    • Handle: RePEc:eee:mateco:v:77:y:2018:i:c:p:39-53
    DOI: 10.1016/j.jmateco.2018.05.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304406818300594
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmateco.2018.05.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter Flaschel, 2010. "Topics in Classical Micro- and Macroeconomics," Springer Books, Springer, number 978-3-642-00324-0, November.
    2. H. Uzawa, 1971. "On a Two-Sector Model of Economic Growth," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 3, pages 19-26, Palgrave Macmillan.
    3. Takayama,Akira, 1985. "Mathematical Economics," Cambridge Books, Cambridge University Press, number 9780521314985.
    4. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    5. Flaschel, Peter & Semmler, Willi, 1987. "Classical and Neoclassical Competitive Adjustment Processes," The Manchester School of Economic & Social Studies, University of Manchester, vol. 55(1), pages 13-37, March.
    6. Emanuel M. Drandakis, 1963. "Factor Substitution in the Two-Sector Growth Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 217-228.
    7. Neri Salvadori & Rodolfo Signorino, 2013. "The Classical Notion of Competition Revisited," History of Political Economy, Duke University Press, vol. 45(1), pages 149-175, Spring.
    8. Emmanuel M. Drandakis, 1963. "Factor Substitution in the Two-Sector Growth Model," Cowles Foundation Discussion Papers 154R, Cowles Foundation for Research in Economics, Yale University.
    9. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676, January.
    10. Steedman, Ian, 1984. "Natural Prices, Differential Profit Rates and the Classical Competitive Process," The Manchester School of Economic & Social Studies, University of Manchester, vol. 52(2), pages 123-140, June.
    11. J. v. Neumann, 1945. "A Model of General Economic Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 13(1), pages 1-9.
    12. Dumenil, Gerard & Levy, Dominique, 1987. "The Dynamics of Competition: A Restoration of the Classical Analysis," Cambridge Journal of Economics, Oxford University Press, vol. 11(2), pages 133-164, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sołtysiak Damian, 2023. "On the stability of a certain Keynes-Metzler-Goodwin monetary growth model," Economics and Business Review, Sciendo, vol. 9(1), pages 26-64, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chatzarakis, Nikolaos & Tsaliki, Persefoni & Tsoulfidis, Lefteris, 2022. "Does the Labour Theory of Value Explain Economic Growth? A Modern Classical View," MPRA Paper 112824, University Library of Munich, Germany.
    2. Neri Salvadori & Rodolfo Signorino, 2013. "The Classical Notion of Competition Revisited," History of Political Economy, Duke University Press, vol. 45(1), pages 149-175, Spring.
    3. PARYS, Wilfried, 2013. "All but one: How pioneers of linear economics overlooked Perron-Frobenius mathematics," Working Papers 2013030, University of Antwerp, Faculty of Business and Economics.
    4. Dung Nguyen, 1983. "A Remark on the Graphical Exposition of Neo-Classical Two-Sector Growth Models," Eastern Economic Journal, Eastern Economic Association, vol. 9(1), pages 37-43, Jan-Mar.
    5. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2022. "Computational methods and classical‐Marxian economics," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 310-349, April.
    6. Ezriel M. Brook, 1971. "Optimal Technological Change and the Distributive Shares," The American Economist, Sage Publications, vol. 15(2), pages 65-75, October.
    7. Ghosh, Dilip K. & Arize, Augustine C. & Zaher, Angie, 2017. "Asymmetric model of neoclassical trade and optimum tax-subsidy-tariff policy," The Journal of Economic Asymmetries, Elsevier, vol. 16(C), pages 87-100.
    8. Keiran Sharpe, 2006. "Effective demand in a stylised Keynesian model of growth," Review of Political Economy, Taylor & Francis Journals, vol. 18(2), pages 173-191.
    9. Giorgio Giorgi, 2022. "Nonsingular M-matrices: a Tour in the Various Characterizations and in Some Related Classes," DEM Working Papers Series 206, University of Pavia, Department of Economics and Management.
    10. Heinz D. Kurz, 2011. "The Contributions of Two Eminent Japanese Scholars to the Development of Economic Theory: Michio Morishima and Takashi Negishi," Chapters, in: Heinz D. Kurz & Tamotsu Nishizawa & Keith Tribe (ed.), The Dissemination of Economic Ideas, chapter 13, Edward Elgar Publishing.
    11. Veneziani, Roberto & Yoshihara, Naoki, 2014. "One million miles to go: taking the axiomatic road to defining exploitation," UMASS Amherst Economics Working Papers 2014-10, University of Massachusetts Amherst, Department of Economics.
    12. Lefteris Tsoulfidis & Persefoni Tsaliki, 2011. "Classical Competition and Regulating Capital: Theory and Empirical Evidence," Discussion Paper Series 2011_02, Department of Economics, University of Macedonia, revised Feb 2011.
    13. Fabio Ravagnani, 2008. "Classical Theory and Exhaustible Natural Resources: Notes on the Current Debate," Review of Political Economy, Taylor & Francis Journals, vol. 20(1), pages 79-93.
    14. Naoki Yoshihara & Roberto Veneziani, 2013. "The Measurement of Labour Content: A General Approach," Working Papers 704, Queen Mary University of London, School of Economics and Finance.
    15. Fausto Gozzi, 2012. "Mathematical Tools for Economic Dynamics: Dynamic Optimization," Discussion Papers 19_2012, CRISEI, University of Naples "Parthenope", Italy.
    16. repec:bap:eebook:02 is not listed on IDEAS
    17. Adelman, Irma & Cheng, Leonard, 1983. "A Dynamic Model of Personal Wealth and Income Distribution in a Growing Closed Economy," CUDARE Working Papers 198262, University of California, Berkeley, Department of Agricultural and Resource Economics.
    18. George Soklis, 2009. "The Conversion of the Supply and Use Tables to Symmetric Input-Output Tables: A Critical Review," Bulletin of Political Economy, Bulletin of Political Economy, vol. 3(1), pages 51-70, June.
    19. Gontijo, Cláudio, 2000. "On the Criticism to the Classical Method," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 54(1), January.
    20. Nikolaos Rodousakis, 2016. "Testing Goodwin’s Growth Cycle Disaggregated Models: Evidence from the Input-Output Tables of the Greek Economy for the years 1988-1997," Bulletin of Political Economy, Bulletin of Political Economy, vol. 10(2), pages 99-118, December.
    21. Rotta, Tomás N., 2021. "Effective Demand and Prices of Production: An Evolutionary Approach," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 90-105.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:mateco:v:77:y:2018:i:c:p:39-53. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jmateco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.