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RICARDO'S THEOREMS ON RELATIVE PRICES A NOTE ON PROF. MORISHIMA
Author(s) -
Plasmeijer Henk W.
Publication year - 1995
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1995.tb00377.x
Subject(s) - depreciation (economics) , relative price , interpretation (philosophy) , commodity , economics , mathematical economics , capital (architecture) , distribution (mathematics) , econometrics , microeconomics , mathematics , computer science , capital formation , finance , profit (economics) , mathematical analysis , archaeology , financial capital , programming language , history
It is argued that Prof. Morishima's treatment of Ricardo's theorems concerning relative price movements following changes in income distribution cannot count as a reasonable interpretation of Ricardo. Firstly, Ricardo linked up these price movements not only to diverging capital intensities, but also to diverging depreciation rates. Secondly, Prof. Morishima's proof seems to depend on a technology specification which is also characteristic of Sraffa's nonbasic commodity. A more reasonable interpretation seems to be that Ricardo tried to investigate a number of modifications on the ‘principle’ that relative prices are regulated by labour values. It is shown that Ricardo's theorems were, as first approximations, not at all bad.