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EQUAL ORGANIC COMPOSITION OF CAPITAL AND REGULARITY
Author(s) -
Burmeister Edwin
Publication year - 2008
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.2007.00302.x
Subject(s) - economics , production (economics) , capital (architecture) , function (biology) , aggregate (composite) , production function , constant (computer programming) , property (philosophy) , composition (language) , consumption (sociology) , microeconomics , mathematical economics , computer science , social science , philosophy , linguistics , materials science , archaeology , epistemology , evolutionary biology , sociology , biology , programming language , composite material , history
Equal organic composition of capital (EOCC) is shown to be a necessary and sufficient condition for constant relative prices in no‐joint production technologies with neoclassical production functions. It is then proved that such neoclassical technologies are regular (which implies that consumption is well behaved across steady‐state equilibria). Regularity is also a necessary and sufficient condition for near aggregation (which implies an aggregate production function with all but one of the usual neoclassical properties). Except perhaps for some fluke cases, the existence of an aggregate production function with all of the usual neoclassical properties ( full aggregation ) requires the stronger EOCC property.