Monday, March 23, 2026

Some Phenomena In Price Theory

I occasionally list thoeretical possibilities that I think interesting. Outside of a working paper at Centro Sraffa, I have not managed to publish papers detailing the possibilities listed in this post. Some I have not even written up outside of blog posts. I now know that:

  • The recurrence of truncation can occur without the reswitching of techniques. This possibility arises in an example of pure fixed capital, with long-lived machines used in both industries that exist in the example.
  • A switch point can lie along a single wage curve, with no other wage curve intersecting at the switch point. This possibility occurs in an example with both fixed capital and rent.
  • The order of rentability can be completely opposite the order of efficiency. This possibility can arise in a model that combines extensive and intensive rent.
  • The partitioning of parameter spcaes by fluke switch points is useful in the analysis of structural economic dynamics with a choice of technique.
  • Capital-theoretic paradoxes are transient, in many instances, in secular time (also known as the very long run).

I have some difficulties in writing these up. First, my status as an independent researching creating examples as a hobby should make reviewers be a bit skeptical. Second, many may not be interested in these refinements. Does not Kurz and Salvadori (1995) provide a definitive statement of post Sraffian price theory? You need to have mastered quite a bit of that to understand the point of any of these. Third, I try to put each in a somewhat more general framework I cast the first, the recurrence of truncation, as an example of the last. I suggest that the second, a switch point along a single wage curve, is an anomalous switch point, a concept I am introducing. I want to say that the third is an example of a special case of a model of intensive and extensive rent in which 'nice' properties of models of extensive rent obtain; wage curves slope down and no issues of the non-existence or multiplicity of cost-minimiing techniques away from switch points arise. Last, when I make such generalizations, I have trouble casting my results into the abstract theorem-proof form needed to be precise.

Is the analysis of structural economic dynamics with a choice of technique an interesting problem? Maybe a book of bookprints never exists at a point of time. Capitalists do not have option of costlessly choosing another page. When a new technique is introduced, it typically dominates the existing technique. On the other hand, I have trouble with part II of Sraffa's book preceding part III. Part II treats joint production, including rent and fixed capital. Part III treats the choice of technique. Which lands to cultivate and what economic lives of machines to adopt are part of the choice of technique. So maybe I should limit my program to aspects of joint production. But I also have some consideration of Harrod-neutral technical progress.

It seems I still have years of work.

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