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Competition and demand-led growth: linking different parts of the Sraffian-inspired research program

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  • Graham White

Abstract

The paper begins with a discussion of how the use of target return pricing may provide a means of thinking about competition as a perturbation of the process by which capacity adapts to demand aggregate. For this purpose some simple simulation exercises with a model incorporating target return pricing and demand led-growth are considered. Discussion then proceeds to a more nuanced view of target return pricing in light of the literature on corporate pricing. This points to a different view of capital mobility compared with that commonly depicted in the literature on gravitation. Finally, the paper moves to a consideration of two kinds of challenges posed by this alternative view of capital mobility for the modelling of competition in a Sraffian approach. The first is the apparent need to consider intra-sectoral competition. The second relates to the appropriate modelling of the profitability signal driving capital mobility.

Suggested Citation

  • Graham White, 2024. "Competition and demand-led growth: linking different parts of the Sraffian-inspired research program," Working Papers 2024-21, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2024-21
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    References listed on IDEAS

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    1. Pierangelo Garegnani, 2024. "Notes on Consumption, Investment and Effective Demand: I," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 387-409, Springer.
    2. Sergio Cesaratto, 2015. "Neo-Kaleckian and Sraffian Controversies on the Theory of Accumulation," Review of Political Economy, Taylor & Francis Journals, vol. 27(2), pages 154-182, April.
    3. Thomas Johnson, H., 1978. "Management Accounting in an Early Multidivisional Organization: General Motors in the 1920s," Business History Review, Cambridge University Press, vol. 52(4), pages 490-517, January.
    4. James A. Clifton, 1983. "Administered Prices In The Context Of Capitalist Development," Contributions to Political Economy, Cambridge Political Economy Society, vol. 2(1), pages 23-38.
    5. Graham White, 2015. "Competition In The Classical Sense And The Sraffa-Keynes Synthesis: Intersecting Research Themes Inspired By The Work Of Sraffa," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 69, pages 131-158.
    6. Attilio Trezzini & Antonella Palumbo, 2016. "The theory of output in the modern classical approach: main principles and controversial issues," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 503-522, October.
    7. Graham White, 2023. "Autonomous demand, expectations and calibration: simulating demand led growth," Working Papers 2023-08, University of Sydney, School of Economics.
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    Keywords

    Cross-dual dynamics; target return; demand-led growth;
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