the dominant technique in joint production systems there was very little discussion of sraffa s theory of joint production during the first ten years after the publication of production of commodities by means of commodities sraffa 1960 because attempts to understand his theory of single product systems and the critique of the dominant theory of capital absorbed all attention thereafter the theory of joint production came increasingly into focus one reason little understood at first was that for the first time sraffa s approach provided economists working in the classical tradition with the possibility of defining prices of production in the presence of multiple product industries when i wrote my mr sraffa on joint production in 1970 luigi pasinetti drew my attention to the famous passage in jevons 1871 1957 in which he invokes joint production to prove that a classical cost of production theory as he understood it could not explain the relative prices of by products a little later sraffa s solution to the explanation of relative prices was used by steedman to criticise marx s form of the labour theory of value steedman 1975

the so called transformation problem revisited a brief comment this comment deals with lipietz s presentation of a solution which had been proposed to the transformation problem lipietz s account can be criticized in two respects first his attempt to integrate the familiar morishima type approach with the newer one is based on a confusion between the conceptual and factual determination of the value of labor power second his demonstration of the mathematical conditions for the validity of the new interpretation rests on an inappropriate conceptualization of the price and quantity mechanisms associated with capitalist competition moreover his results could not be applied to a more general framework which took account for example of joint production

the mercantile form of value and its place in marx s theory of the commodity this paper reinterprets marx s theory of the form of value in the context of his theory of the commodity building on the unresolved tension between marx s concept of value and the specific character of the labour constituting itself as value in his theory of commodity production it is argued that marx s is actually a theory of the mercantile form of value thus it becomes evident that the process of realisation of material production in commodity production and the process giving rise to money are the same and that they are only the material manifestation of the process of realisation of private and independent work as social labour this characterises commodity production as the unity in difference of a material and a social moment showing that marx s mercantile form of value is the conceptualisation of adam smith s invisible hand the paper also argues that marx s is not the theory of a money commodity copyright 2012 oup

new labour and work time regulation a marxian analysis of the uk economy this paper examines the impact of work time regulation introduced by the uk s new labour governments 1997 to 2010 in doing so we return to marx s hypotheses regarding the length of the working day these include the arguments that class conflict over the length of the working day is inherently distributional in a surplus value sense and that workers often display a preference for reduced hours even with a proportionate reduction in pay our quantitative marxist methodology provides a way of assessing the pattern of surplus value before and during the period of office of the new labour governments and the distributional effects of regulation the impact of such regulations on workers preferences are examined through an investigation of british household panel survey data although many have been sceptical concerning the record of the last labour governments policies such as the working time regulations 1998 and the work life balance campaign 2000 are found to have been noteworthy innovations in the labour market this is all the more important given recent moves by the successor government to weaken work time regulation our results suggest the impact of these policy initiatives was broadly favourable though the effect on men and women was different

approximate surrogate production functions the cambridge debate showed that an aggregation of capital is not possible in general a recent investigation has found one example for reswitching and several for reverse capital deepening but the paradoxes appear to be infrequent the paper provides a theoretical justification of this result and shows how wage curves of input output matrices with small non dominant eigenvalues become quasi linear with some numeraires large random systems lead to the genesis of such states approximate surrogate production functions then seem possible a family of economic systems with constant capital composition allows construction of a surrogate production function copyright oxford university press

econometric evaluation of consumers expenditure equations large errors in forecasting consumption in the late 1980s and early 1990s were a major contribution to the poor performance in economic forecasting overall these errors have been attributed to the inability of existing models to capture important influences on consumer behavior such as the effects of financial deregulation and shifts in expectations revisions to models followed their failure to predict the late 1980s boom an important question is whether these developments help to explain the unanticipated downturn in consumers expenditure in the early 1990s this article presents an appraisal of eight recent u k consumption functions it is found that these models can explain much of the rise in consumption in the late 1980s however forecast errors for the early 1990s while within the historical range are predominantly negative the nature of this overprediction suggests that further research on household finances including the role of housing as collateral is required copyright 1994 by oxford university press

inventory stability and resource allocation under uncertainty in a command economy this paper focuses on a theoretical issue involved in modeling the functioning of a centrally planned economy results derived in a model of inventory behavior indicate that the uncertain consequences of economic decisions and their cumulative impact on the functioning of the economy need to be explicitly recognized in order to study plan implementation when this is done the need for institutions or procedures with homeostatic properties i e negative feedback mechanisms is revealed without such mechanisms orders consistent with a feasible plan may be unable to insure implementation of that plan even when all economic agents are perfectly motivated three types of feedback mechanisms resolving this difficulty are formulated and discussed with respect to inventory behavior in a centrally planned economy

why do monetary policies matter an experimental study of saving and inflation in an overlapping generations model we study experiments of an overlapping generations model where inflation is determined by the monetary policy and by the amount of average saving within each period we use a new experimental setup that allows us to observe more details of the process of expectation forming and separate this process from the actual saving process in contrast to experimental findings by lim prescott sunder marimon spear sunder and marimon sunder we find that 1 agents do not form first order adaptive expectations 2 subjects over save for precautionary reasons as a result 3 the so called friedman conjecture holds i e monetary policies which are equivalent in static equilibrium exhibit different levels and different volatility of inflation in the experiment this may generate important policy trade offs between monetary regimes we discuss our findings and relate them to current research on adaptive learning and the role it may have in ranking alternative monetary policies

distributive shares in the us economy 1964 2001 specifying the labour theory of value in a way that distinguishes both productive from unproductive labour and production workers from supervisory workers this paper considers distributive shares in the us economy between 1964 and 2001 trends in productive and unproductive labour are explored in full time equivalents hours and money after 1979 there was a large shift of money value not matched by a shift in either hours or employment from the wages paid to productive labour to those paid to supervisory labour since the wage share in money value added of non supervisory labour in unproductive sectors was approximately constant the 1980s and 1990s also saw the profits share squeezed by the rising wage share of supervisory workers some implications of this are explored in the construction of a class rather than a factor approach to distributive shares

a strategy experiment in dynamic asset pricing this study presents a strategy experiment in a simple dynamic asset pricing model where the current market equilibrium asset price is determined by aggregated individual expectations of next period s price after participating in an introductory laboratory experiment on expectation formation participants formulate a complete forecasting strategy these strategies are programmed and markets are simulated participants receive feedback from the results of these simulations and can adapt their strategy four rounds are played and the entire experiment lasts eight weeks a final laboratory experiment compares predictions of participants with the predictions of the submitted strategy we find that most of the participants submit complicated strategies and that strategies become more complicated over the rounds most markets converge to a steady state price only after many periods if at all the number of converging price sequences increases over the rounds these results suggest in general slow convergence and learning of the subjects over the rounds even in a stationary environment learning the correct fundamental price level turns out to be difficult an important part of the non convergence seems to be caused not by individual strategies but by the interaction of several strategies from the final experiment we conclude that the strategies are a good representation of what participants do in a laboratory experiment

experimental evidence on the persistence of output and inflation this article presents experimental evidence from a monetary sticky price economy in which output and inflation depend on expected future inflation rational inflation expectations do not allow for persistent deviations of output and inflation following a monetary shock in the experimental sessions however output and inflation display considerable persistence and regular cyclical patterns

nonexpert beliefs about the macroeconomic consequences of economic and noneconomic events economists assume that individuals think about the economy like economists which is especially important in all rational expectations and economic voting models despite contrasting evidence there has been little research on actual nonexpert macroeconomic beliefs in this paper i present the results of a survey among students designed to find out whether they distinguish macroeconomically relevant from irrelevant events i find that even people with some economic background tend to overestimate the effects of noneconomic events this bias is a function of gender economic training and the preferred means of mass communication

personal bankruptcy and credit market competition we document a link between u s credit supply and rising personal bankruptcy rates we exploit the exogenous variation in market contestability brought on by banking deregulation the relaxation of entry restrictions in the 1980s and 1990s at the state level we find deregulation explains at least 10 of the rise in bankruptcy rates we also find that deregulation leads to increased lending lower loss rates on loans and higher lending productivity our findings indicate that increased competition prompted banks to adopt sophisticated credit rating technology allowing for new credit extension to existing and previously excluded households the last quarter century saw a dramatic increase in the share of u s con sumers filing for personal bankruptcy thereby seeking a discharge of their unsecured debt in 2005 this increase led to the most comprehensive change to u s bankruptcy law since 1978 while several causes for the rise in bankruptcies have been advanced and it is the subject of ongoing research two potentially significant changes occurred during this period banking deregulation the relaxation of bank entry restrictions in the 1980s and 1990s and technological change in consumer lending banking deregulation by removing barriers to entry increases credit market competition and there fore affects the supply of credit new screening technologies change the way loans are made allowing for interest rates to better reflect underlying risk and thus facilitating lending to riskier borrowers in this paper we examine whether banking deregulation and technological change played a role in the increase in consumer bankruptcy the empirical literature has mostly focused on cross sectional differences in personal bankruptcy in particular it has revolved around legal institutions as a way to answer whether consumers file due to adverse events as part of a rational financial calculation or as a consequence of unfair or deceptive lending practices usually researchers have exploited the different asset exemptions across u s states i e the amount of personal assets protected from creditors

understanding the marxian notion of exploitation a summary of the so called transformation problem between marxian values and competitive prices the ending in the second part of the article the author examines the so called problem of transformation first he analyze certain contradiction faced by marx in the third volume of capital in studying the question of how to transform the cost into the price then he turns to the problem of inverse transformation and argues that marx procedure works only in a single case equal organic composition of capital the third part of the article bibliography provides an overview of the work on the analysis of marx s theory

animal spirits heterogeneous expectations and the amplification and duration of crises we introduce a simple equilibrium model of a market for loans households lend to firms and form expectations about their loan default probability under heterogeneous expectations with switching between forecasting strategies driven by reinforcement learning even a small fraction of pessimistic traders has a large aggregate effect causing a heterogeneous expectations risk premium i e significantly higher contract rates for loans and significantly lower output our stylized model illustrates how animal spirits and heterogeneous expectations may lead to aconfidence loss and to financial instability amplifying the magnitude of economic crises and slowing down recovery

the transformation problem solved the so called general transformation problem is introduced and it is shown that any actual economy of multiproduct firms with joint production and technical change is traceable to a corresponding labor theory of value economy of labor values and unrewarded labor as profits conversely the labor theory of value economies are transformable into the economies of prices and profits and profits by means of prices of labor can be distributed at will including the celebrated case of equalized profit rates even negative profits in some or all units all economies are therefore labor theory of value economies distorted by prices the author claims to have solved the transformation problem and that his work validates the labor theory of value in the spirit of david ricardo and karl marx but without marx s tools copyright 1989 by oxford university press

the transformation problem abstract the history of the marxian transformation problem is surveyed from 1885 to the present particular emphasis is placed on the less well known literature and the focus is on problems of interpretation rather than on technicalities a substantial bibliography is provided

company sector money demand new evidence on the existence of a stable long run relationship for the united kingdom the u k departure from the european exchange rate mechanism has created an urgent need for new indicators of monetary policy stance traditional simple sum monetary aggregates have proven unreliable particularly in the face of the financial innovations of the 1980s micro theory suggests that inappropriate aggregation over heterogeneous assets and holders may be to blame the present paper tests for weak separability of asset groupings for the u k company sector divisia weighted aggregates are constructed for the resulting narrow and broad groupings it is shown that stable long run relationships corresponding to money demand equations exist for these aggregates arbitrary dummies representing financial innovation are not required in contrast to some other work in this area copyright 1994 by ohio state university press

do fiscal variables affect fiscal expectations experiments with real world and lab data we generate observable expectations about fiscal variables through laboratory experiments using real world data from several european countries as stimuli we compare a var model of expectations for data which is presented in a fiscal frame with one for neutrally presented data we measure the degree to which participants use fiscal data for their forecasts agents expectations are found neither to be consistent with rational nor with purely adaptive expectations but instead follow an augmented adaptive scheme methodological implications of the present approach for experiments in macroeconomics are also discussed

expectations and bubbles in asset pricing experiments abstract we present results on expectation formation in a controlled experimental environment in each period subjects are asked to predict the next price of a risky asset the realized market price is derived from an unknown market equilibrium equation with feedback from individual forecasts in most experiments prices deviate from the benchmark fundamental and bubbles emerge endogenously these bubbles are inconsistent with rational expectations and seem to be driven by trend chasing behavior or positive feedback expectations of the participants we also analyze individual predictions of participants and find that participants within a group tend to coordinate on a common prediction strategy

a re in statement of the labour theory of value this paper surveys and argues for an account of labor values and prices in the marxian tradition that is not subject to the usual criticisms concerning their conceptual coherence and empirical relevance this reformulation first suggested independently of each other by g dumeenil and d k foley provides a powerful account that overturns almost a century of misconceived orthodoxy in doing so it enables a theoretically coherent account of the value of labor power and an empirical account of the fundamental categories of capitalism copyright 1994 by oxford university press

one million miles to go taking the axiomatic road to defining exploitation this paper analyses the marxian theory of exploitation a general axiomatic approach is developed which is appropriate to study the concept of exploitation what it is and how it should be captured empirically two properties are presented that capture some fundamental marxian insights it is shown that contrary to the received view there exists a nonempty class of definitions of exploitation that preserve the relation between exploitation and profits called profitexploitation correspondence principle in general economies with heterogeneous agents complex class structures and production technologies with heterogeneous labour inputs however among the main approaches only the so called new interpretation satisfies the profitexploitation correspondence principle in general jel b51

microfoundations for a stable demand for money function scientific revolutions seldom occur when the prevailing theories appear to be performing well it is only when the accepted theory fails to offer a satisfactory explanation of events that new and more robust theories are proposed of these new theories the one which can explain the successful performance of the previous theory and also the events which led to its demise becomes the replacement so it is in the history of modern monetary economics the failure of the partial adjustment model in the mid s is well documented in the united kingdom and the united states and the search for a replacement has been the main point on the agenda since that time there are many contending theories some of which are advocated by the other contributors to this controversy but the mark of a truly better theory which can be claimed to supersede the partial adjustment model is one that can explain the success and the breakdown of the previous theory as well as the events subsequently central to the argument of this paper is the importance of individual behaviour in the context of a market for monetary assets only by means of careful investigation of the microeconomic behaviour underpinning monetary economics at the individual and the market level can the stability of the money demand function be restored it is the purpose of this paper to suggest that the buffer stock approach has gone further than other approaches in dealing with the fundamental micro foundations of the demand for money it does not suggest that other approaches have no microfoundations but they tend to concentrate exclusively on specific aspects of the micro structure such as separability and ignore others relating to the behaviour of individual optimisers in a monetary market the buffer stock model has firm micro foundations which can explain the events both before and after the breakdown of the partial adjustment model section i provides an historical background to the debate and section ii gives a brief overview of buffer stock models which shows that unlike other approaches they have been able to reconcile the past success of the partial adjustment model with its present failure the nature of the microfoundations of buffer stock models are the source of the success and are discussed in more detail in section iii the final section evaluates the buffer stock approach in the light of the other alternatives

the demand for money a dynamic rational expectations model macroeconomic modelling generally has widely adopted the use of forwardlooking variables in behavioural relationships studies of the demand for money being something of an exception the aim of this paper is to provide preliminary empirical results of a model which explicitly incorporates expectations of the future into the demand function for narrow money the approach adopted is the modelling of the demand for money within a multi period costs of adjustment framework under the assumption of rational expectations agents are assumed to pursue a target or long run level of money balances which is itself a function of prices income and interest rates this results in an empirical specification which consists of both backwardlooking and forward looking components the model is estimated using uk data for the period i963i i983iii the remainder of the paper is divided into four sections in section i we outline the framework in which our model is derived in the following section we discuss the econometric techniques used and in section iii we present our empirical results a final section concludes

the assessment consumer expenditure this article aims to illuminate two sets of consumption puzzles the first concerns the behavior of aggregate saving rates in the 1980s and early 1990s collapse and rebound in scandinavia and the u k and apparently a more secular decline in the u s the second set of puzzles concerns various apparent contradictions of the rational expectations permanent income hypothesis e g in time series the excess sensitivity of consumption changes to anticipated income changes and in cross sections the tendency of consumption and income age profiles to follow each other more than standard life cycle theory implies the article discusses in relatively non technical terms the implications both for euler equations and solved out consumption functions of introducing uncertainty credit constraint consumption leisure interactions habits and durability alternative to rational expectations the illiquidity of some assets and financial deregulation it also compares the merits of euler and solved out models of aggregate consumption

consumer credit in an era of financial liberalization an overreaction to repressed demand in this article we empirically analyse the factors which determined consumer credit in greece in the period before and after the financial liberalization while accounting for significant changes in structure due to the lifting of credit restrictions and the subsequent impressive boom of consumer loans we use multivariate cointegration techniques to estimate a vector error correction model vecm and identify separate demand and supply relationships for consumer loans we introduce demand and supply related shifts in parameters through the inclusion of appropriate dummy variables and trends in the long run relationships we partly deviate from the typical johansen procedure and estimate the model in two steps we find that the theoretical exclusion and coefficient size restrictions on the demand and supply cointegrating vectors are valid our results are consistent with the operation of a bank lending channel in greece we also find that the supply side was mostly responsible for the acceleration of con

value price and exploitation the logic of the transformation problem this paper tries to clarify the logical structure of the relationship between labor values and prices from an axiomatic perspective the famous transformation problem is interpreted as an impossibility result for a specific interpretation of value theory based on specific assumptions and definitions a comprehensive review of recent literature is provided which shows that there are various theoretically relevant and logically consistent alternative interpretations based on different assumptions and definitions

notes and comments new solution or re in statement a reply the formalisations of the labour theory of value that culminated in morishima 1973 pasinetti 1977 and steedman 1977 merely served to show that the labour theory of value had no operational significance in the explanation of observable phenomena the standard interpretation of the marxian account of labour values monetary prices and the relation between them has technology and labour input requirements determining labour values the same technology and labour input requirements plus a specification of the wage determining relative prices and a normalisation condition determining price levels but this approach leads precisely nowhere the only meaningful relation between labour values and prices is through the proposition that a positive rate of exploitation is a neces sary and sufficient condition for a positive rate of profit a proposition that can evidently be reversed and whose empirical implications are meagre in the extreme and issues of joint production and choice of technique problematise the whole approach all of this is well known

a dynamic model of money credit and consumption a joint model for the uk household sector previous research has investigated consumers expenditure and money demand as separable equations we estimate them jointly as driven by the same influences credit is also included as a potential third variable that might provide a source of additional information about the monetary transmission mechanism consumption money and lending equations are modelled as an interdependent system and the significance of lending for consumption andmoney is tested theresults using uk household sector data show that a stable credit equation does exist in parallel with money demand and consumption equations and that interactions modelled in a conditional vector equilibrium correction system are favoured over independent equations

class and exploitation in general convex cone economies abstract in this paper we examine what appropriate formulations for labor exploitation are in order to explain the emergence of class and exploitation status in capitalist economies given the well known controversy pertaining to plausible formulations for labor exploitation in joint production economies we propose an axiom axiom for labor exploitation le which every appropriate formulation of labor exploitation should satisfy using this axiom the necessary and sufficient condition for plausible formulations of labor exploitation is characterized to verify class exploitation correspondence principle cecp roemer 1982 according to this cecp no longer holds in general convex cone economies if the well known formulations of labor exploitation such as morishima 1974 and roemer 1982 chapter 5 are applied therefore we propose two new definitions of labor exploitation each of which verifies cecp

aggregate capital productivity in the us economy 1964 2001 in the decomposition of the us macroeconomic pre tax rate of profit as the product of profit share and capital productivity this paper considers the role of capital productivity over the period 1964 2001 the primary finding is that prior to 1982 capital productivity fell because capital deepening proceeded faster than labour productivity growth whereas from 1982 to 1997 the opposite occured if prior to 1982 the us economy was characterised by marx biased technical progress what requires explanation is why labour productivity continued to grow after 1982 in the absence of sufficient capital deepening the paper explores various hypotheses contrasts neoclassical and classical notions of technical change and investigates the robustness of its results to the productive unproductive distinction and to accounting for changes in capacity utilisation

individual expectations limited rationality and aggregate outcomes recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price we present an experiment where the fundamental price experiences large unexpected shocks markets with negative expectation feedback strategic substitutes quickly converge to the new fundamental while markets with positive expectation feedback strategic complements do not converge but show underreaction in the short run and overreaction in the long run a simple evolutionary selection model of individual learning explains these differences in aggregate outcomes

labour time versus alternative value bases a research note this paper provides empirical support for the law of value understood as the proposition that embodied labor time is conserved in exchanges of commodities market prices are well correlated with the sum of direct and indirect labor content is it possible to produce equally good correlations by taking the sum of direct and indirect x content where x is some input other than labor time the authors repeat the analysis for electricity iron and steel and oil and show that the answer is no the high correlations in the case of labor time are therefore not a statistical artifact copyright 1997 by oxford university press

realization and accumulation in a marxian model of the circuit of capital abstract a mathematical model of marx s circuit of capital is presented whose elements the composition of capital the rate of surplus value the rate of capitalization of surplus value and production sales and financial time lags are measurable from the accounts of capitalist firms the model is solved for exponential paths a solution with a positive rate of accumulation generally exists on paths with positive rates of accumulation and positive time lags in the recommital of realized value to production an expansion of credit is required to permit the sale of commodities a model of demand pull inflation is incorporated in the framework

information learning and expectations in an experimental model economy the experimental learning to forecast literature finds that subjects use simple linear backward looking models when forecasting in environments with little to no inout the economic framework we study the formation of expectations in a laboratory economy of monopolistic firms and labour unions with almost complete knowledge of the model we observe simple backward looking rules but also a considerable share of model based expectations using information on the economic structure at least for some subjects expectations are informed by theory as in the previous literature we find individual prediction rules to be heterogeneous

tests of the rational expectations hypothesis this paper reviews evidence on the structure of anticipation from a number of empirical studies jack muth s rational expectations hypothesis is compared with a variety of alternative models including ferber s law the implicit expectations model of edwin mills and muth s new errors in the variables model the cumulative evidence is of such strength as to compel the suspension of belief in the concept of rational expectations this implies that it is a mistake to proceed under the maintained hypothesis that expectations are rational instead it is necessary to test the sensitivity of empirical and theoretical results to alternative assumptions about the structure by which anticipations are generated copyright 1986 by american economic association

notes and comments a re in statement of the labour theory of value a comment the aim of this paper is to show that the main conclusions in mohun s 1994 paper rest on an implicit assumption the composition of net output has to remain constant when this is removed some paradoxical results are obtained copyright 2000 by oxford university press