Fabio Petri
DEPS, USiena
Abstract
This paper attempts a pedagogical explanation of what the debates in capital theory around Sraffa’s results are about, and why they have profound implications for the theory of income distribution. First it is pointed out that the classical or surplus approach does not suffer from the inconsistencies it was accused of. Then the difference is stressed between traditional neoclassical theory which attempted the determination of long-period general equilibria, and the neo-Walrasian versions. A simple model illustrates the need for a given endowment of value capital for the determination of long-period equilibria; the impossibility of specifying this endowment is pointed out; the abandonment of that treatment of capital in the neo-Walrasian versions is shown to render those versions incapable of indicating the behaviour of actual economies
Jel Codes
B21 B51 D50
