Friday, December 09, 2016

Basic Commodities and Multiple Interest Rate Analysis

I have a new working paper on the Social Science Research Network:
Abstract: This paper considers the application of multiple interest rate analysis to a model of the production of commodities by means of commodities. A polynomial, for the characteristic equation of the augmented input-output matrix, is used in defining the rate of profits in such a model. Only one root is found to be economically meaningful. No non-trivial application of multiple interest rate analysis is found in the analysis of the choice of technique. On the other hand, multiple interest rate analysis can be used in defining Net Present Value in an approximate model, in which techniques are represented as finite series of dated labor inputs. The product of the quantity of the first labor input and the composite interest rate approaches, in the limit, the difference between the labor commanded by and the labor embodied in final output in the full model.

I am proud of some observations in this paper. Nevertheless, I think it tries to go in too many directions at once. It is also longer than I like. It may seem, at first glance, to be longer than it is. I have ten graphs scattered throughout.

Michael Osborne cannot deny that I have taken his research seriously. He needs somebody with more academic credibility than me to write on his topic, though.

This is one paper where I would not mind being shown to be wrong. I did not find any use for more than one eigenvalue of what I am calling the augmented input-output matrix. If somebody can find something useful, along the line of multiple interest rate analysis, to say about all eigenvalues, I would be interested to hear of it.

Update: I accidentally first posted without a "not" in the first sentence of the last paragraph. (I normally silently update typographic errors, but that one changes the meaning.)

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