Knowledge, Truth and the History of Economic Thought
Edited by Stephan Boehm, Christian Gehrke, Heinz D. Kurz and Richard Sturn
Chapter 23: Sraffa's price equations: a stationary economy or 'normal positions'?
23. SraffaÕs price equations: a stationary economy or Ônormal positionsÕ? Pierangelo Garegnani SEVEN POINTS FOR DISCUSSION 1. It is often argued that SraffaÕs (1960) analysis relates to a stationary or steady growth economy (for example, Hicks, 1990: 100, 1985, passim; Samuelson, 2000, 136): even authors sympathetic to SraffaÕs classical approach appear sometimes to view that assumption as being entailed by his equations, where the prices of the commodity inputs at the beginning of the production cycle are the same as those of the outputs at the end of it. Although I have not had the opportunity to give close consideration to some recent literature on the matter, certain points raised in this session induce me to submit for discussion a few reflections on the subject, one with which I have been concerned in the past (Garegnani, 1976). I shall here argue for two theses. The first is that, in the context of classical theory in which Sraffa (1960) must be placed, the forces that are seen to govern the economy do not admit of a formalized dynamic theory based on dated prices as distinct from admitting of dynamic models, which can of course always be built, if relevant, in order to deal with particular questions or explore the logical implications of assumptions admitted to be special. The second thesis is that, in contemporary literature, consideration of price changes1 within the equations determining prices has not been the result of an attempt at a closer approximation to reality,...
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