IDEAS home Printed from https://ideas.repec.org/a/eee/phsmap/v416y2014icp518-531.html
   My bibliography  Save this article

A dual theory of price and value in a meso-scale economic model with stochastic profit rate

Author

Listed:
  • Greenblatt, R.E.

Abstract

The problem of commodity price determination in a market-based, capitalist economy has a long and contentious history. Neoclassical microeconomic theories are based typically on marginal utility assumptions, while classical macroeconomic theories tend to be value-based. In the current work, I study a simplified meso-scale model of a commodity capitalist economy. The production/exchange model is represented by a network whose nodes are firms, workers, capitalists, and markets, and whose directed edges represent physical or monetary flows. A pair of multivariate linear equations with stochastic input parameters represent physical (supply/demand) and monetary (income/expense) balance. The input parameters yield a non-degenerate profit rate distribution across firms. Labor time and price are found to be eigenvector solutions to the respective balance equations. A simple relation is derived relating the expected value of commodity price to commodity labor content. Results of Monte Carlo simulations are consistent with the stochastic price/labor content relation.

Suggested Citation

  • Greenblatt, R.E., 2014. "A dual theory of price and value in a meso-scale economic model with stochastic profit rate," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 416(C), pages 518-531.
    • Handle: RePEc:eee:phsmap:v:416:y:2014:i:c:p:518-531
    DOI: 10.1016/j.physa.2014.08.061
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378437114007468
    Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000
    File URL: https://libkey.io/10.1016/j.physa.2014.08.061?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. Ochoa, Eduardo M, 1989. "Values, Prices, and Wage-Profit Curves in the U.S. Economy," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 413-429, September.
    2. Nitzan, Jonathan & Bichler, Shimshon, 2009. "Capital as Power. A Study of Order and Creorder," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 157973, July.
    3. Lefteris Tsoulfidis, 2002. "Values, prices of production and market prices: some more evidence from the Greek economy," Cambridge Journal of Economics, Oxford University Press, vol. 26(3), pages 359-369, May.
    4. Julian Wells, Julian, 2007. "The rate of profit as a random variable," MPRA Paper 98235, University Library of Munich, Germany.
    5. Greenblatt, R.E., 2013. "Rates of profit as correlated sums of random variables," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(20), pages 5006-5018.
    6. Anwar M. Shaikh, 1998. "The Empirical Strength of the Labour Theory of Value," Palgrave Macmillan Books, in: Riccardo Bellofiore (ed.), Marxian Economics: A Reappraisal, chapter 15, pages 225-251, Palgrave Macmillan.
    7. Frederic Lee & Steve Keen, 2004. "The Incoherent Emperor: A Heterodox Critique of Neoclassical Microeconomic Theory," Review of Social Economy, Taylor & Francis Journals, vol. 62(2), pages 169-199.
    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. 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.

    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. Lefteris Tsoulfidis & Dimitris Paitaridis, 2017. "Monetary Expressions of Labour Time and Market Prices: Theory and Evidence from China, Japan and Korea," Review of Political Economy, Taylor & Francis Journals, vol. 29(1), pages 111-132, January.
    2. Torres-González, Luis Daniel, 2022. "The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 622-659.
    3. Theodore Mariolis & George Soklis & Eugenia Zouvela, 2013. "Testing Böhm-Bawerk’s theory of capital: Some evidence from the Finnish economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(2), pages 207-220, June.
    4. Han Cheng & Minqi Li, 2020. "Do Labor Values Explain Chinese Prices? Evidence from China’s Input-Output Tables, 1990–2012," Review of Radical Political Economics, Union for Radical Political Economics, vol. 52(1), pages 115-136, March.
    5. Luis Daniel Torres-González, 2020. "The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves," Working Papers 2016, New School for Social Research, Department of Economics.
    6. Theodore Mariolis & Lefteris Tsoulfidis, 2018. "Less Is More: Capital Theory And Almost Irregular-Uncontrollable Actual Economies," Contributions to Political Economy, Cambridge Political Economy Society, vol. 37(1), pages 65-88.
    7. Alan Freeman, 2010. "Crisis and “law of motion” in economics: a critique of positivist Marxism," Research in Political Economy, in: The National Question and the Question of Crisis, pages 211-250, Emerald Group Publishing Limited.
    8. Blair Fix, 2022. "Economic development and the death of the free market," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 1-46, April.
    9. Theodore Mariolis & Lefteris Tsoulfidis, 2016. "Capital theory ‘paradoxes’ and paradoxical results: resolved or continued?," Evolutionary and Institutional Economics Review, Springer, vol. 13(2), pages 297-322, December.
    10. Jacobo Ferrer-Hernández & Luis Daniel Torres-González, 2021. "Eigenvalues and Eigenlabors: On Iliadi’s, Mariolis’, Soklis’, and Tsoulfidis’ Explanation of the Empirical Regularities in Price Curves," Working Papers 2119, New School for Social Research, Department of Economics.
    11. Basu, Deepankar, 2015. "A Selective Review of Recent Quantitative Empirical Research in Marxist Political Economy," UMASS Amherst Economics Working Papers 2015-05, University of Massachusetts Amherst, Department of Economics.
    12. Cockshott, Paul & Zachariah, David, 2014. "Conservation laws, financial entropy and the Eurozone crisis," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-55.
    13. Andrea Vaona, 2014. "A panel data approach to price–value correlations," Empirical Economics, Springer, vol. 47(1), pages 21-34, August.
    14. 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.
    15. 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.
    16. Fix, Blair, 2020. "Economic Development and the Death of the Free Market," SocArXiv g86am, Center for Open Science.
    17. Deepankar Basu, 2017. "Quantitative Empirical Research In Marxist Political Economy: A Selective Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1359-1386, December.
    18. Anwar Shaikh, 2018. "Skilled Labor in the Classical tradition," Working Papers 1801, New School for Social Research, Department of Economics.
    19. Mariolis, Theodore & Tsoulfidis, Lefteris, 2010. "Eigenvalue distribution and the production price-profit rate relationship in linear single-product systems: theory and empirical evidence," MPRA Paper 43716, University Library of Munich, Germany.
    20. Peter Flaschel & Nils Fröhlich & Roberto Veneziani, 2013. "The sources of aggregate profitability: Marx's theory of surplus value revisited," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(3), pages 299—312-2, December.

    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:phsmap:v:416:y:2014:i:c:p:518-531. 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.journals.elsevier.com/physica-a-statistical-mechpplications/ .

    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.