Sraffian Interdependence and Partial Equilibrium Analysis
The conventional partial equilibrium analysis of input demands star ts from the cost-minimization condition and then supposes that only one input price changes. But if initial prices make price equal to unit cost in every industry, changing only one price means violating the price equals unit cost conditions. Here, by contrast, price-cost equality is maintained throughout. Primary input price-quality relations now need not be negative when there is input complementarit y, and produced input price-quality relations now need not be negative even when all inputs are substitutes. This is so even with a constant , zero rate of interest. Copyright 1988 by Oxford University Press.
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Volume (Year): 12 (1988)
Issue (Month): 1 (March)
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