Demystifying Sraffa’s Theory of Value in the Light of Arrow and Debreu
This paper compares the models of Arrow and Debreu  and Sraffa , and concludes that (1) the models are informationally distinct conceptions of a capitalist economy, (2) they support radically distinct – though complete and entirely correct – theories of value, (3) the prices in the two theories are different both in terms of definitions and values, (4) in Sraffa‘s model it is impossible to define constant returns to scale, while in Arrow-Debreu this property is admissible, and (5) in Arrow-Debreu the interpersonal income distribution is determined whereas in Srafa‘s model the distribution of income between workers and capitalists is undetermined.
|Date of creation:||2011|
|Publication status:||Forthcoming in|
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- Samuelson, Paul A. & Etula, Erkko M., 2006. "Testing to confirm that Leontief-Sraffa matrix equations for input/output must obey constancy of returns to scale," Economics Letters, Elsevier, vol. 90(2), pages 183-188, February.
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"Theory of Production,"
Cambridge University Press, number 9780521588676, December.
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