Fluke Switch Points in Pure Fixed Capital Systems

I have a working paper at the Centro Sraffa.

Abstract: This article considers structural economic dynamics, in models with fixed capital and a choice of technique, of the production of commodities. Fluke switch points are described and cataloged. For fluke switch points, parameter perturbations create a qualitative change in how the choice of technique varies with distribution. Techniques are presented for visualizing partitions of parameter spaces such that the analysis of the choice of technique does not vary within each region. Implications are drawn about the choice of the truncation of the operation of (or the economic life of) machines and about the adoption of roundabout techniques.