Abstract: This chapter asks whether a return to the theory of long-period prices can be a fruitful alternative to the problematic neo-Walrasian general equilibrium determination of prices. First, it discusses whether modern analyses undermine the traditional thesis of a gravitation towards a uniform rate of return, or of profit, on capital; the conclusion is that the traditional view remains convincing. Then the chapter enlarges the theory of long-period prices to include joint production and extensive and intensive land rent, using mostly a graphical analysis but also some results from linear programming; the meaning of negative labours embodied is clarified; some unusual forms of land rent appear; some cases emerge in which technical choice does not seem to bring to definite results. Then the chapter reports some discussion on the treatment of quantities as given in the ‘core’ (Garegnani’s meaning of the term) of classical theory, and on whether Sraffa’s analysis needs or not constant returns to scale. The conclusion is of moderate optimism, there are open problems but they do not appear to undermine the long-period method.
Publication Year: 2021
Publication Date: 2021-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 1
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