The von-Neumann-Sraffa Model
Jonathan F. Cogliano, Peter Flaschel, Reiner Franke, Nils Fröhlich, Roberto Veneziani · Edward Elgar Publishing eBooks · 2018
In the previous chapters, we have examined classical production prices in linear models in which each industrial sector produces a single output—also known as the basic Leontief model. We have proved that, under some general assumptions on technology, production prices are well-defined, unique and strictly positive. We have interpreted these production prices as a long-period equilibrium: prices of production emerge when capitalist profit-maximizing behavior, and workers’ competition for jobs, ensure that a uniform profit rate and a uniform wage rate emerge in all sectors. Furthermore, under some additional mild assumptions, all sectors are operated in a classical long-period equilibrium.