Abstract
This paper analyzes the local stability properties of the equilibrium solution of a multi-sectoral model with a linear production technology. The pivotal magnitudes in the adjustment process are the market rates of profit. Three different definitions of the market rates of profit are introduced which correspond to different types of the implicit decision behavior. It is shown that the stability properties of the market process depend essentially on this specification.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
W.J. Baumol,Economic Dynamics. An Introduction, 3rd ed. (MacMillan, New York, 1970).
C. Benetti, La question de la gravitation des prix de marche dans la "Richesse des Nations", Cahiers d'économie politique 6(1981)9–31.
L. Boggio, On the stability of production prices, Metroeconomica 37(1985)241–267.
V. Chick,Macroeconomics after Keynes (Philip Allan, Oxford, 1983).
G. Duménil and D. Lévy, The dynamics of competition: A restoration of the classical analysis, Cambridge J. Econ. 11(1987)133–164.
G. Duménil and D. Lévy, Équilibrages par les prix et par les quantités dans le cadre d'une microéconomie d'inspiration classique, Revue d'économie politique 98(1988)127–149.
G. Duménil and D. Lévy, The competitive process in a fixed capital environment: A classical view, The Manchester School 57(1989)34–57.
M. Egidi, Stabilità ed instabilità negli schemi sraffiani, Economia Internazionale 28(1975)3–41.
P. Flaschel and W. Semmler, Classical and neo-classical competitive adjustment processes, The Manchester School 55(1987)13–37.
E. Hosoda, On the classical convergence theorem, Metroeconomica 37(1985)157–174.
I. Kubin, Stability in classical competition: An alternative to Nikaido's approach, Zeits. Nationalökonomie/J. Econ. 50(1989)223–235.
I. Kubin,Natural Prices and Market Prices. A Study in the Classical Process of Gravitation (P. Lang, Frankfurt, 1991).
D.G. Luenberger,Introduction to Dynamic Systems (John Wiley, New York, 1979).
H. Nikaido, Marx on competition, Zeits. Nationalökonomie 43(1983)337–362.
H. Nikaido, Dynamics of growth and capital mobility in Marx's scheme of reproduction, Zeits. Nationalökonomie 45(1985)197–218.
P. Sraffa,Produzione di Merce a Mezzo di Merce (Einaudi, Torino, 1960).
I. Steedman, Natural prices, differential profit rates and the classical competitive process, The Manchester School 52(1984)123–140.
D. Whitley, Discrete dynamical systems in dimension one and two, Bull. London Math. Soc. 15(1983)177–217.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Kubin, I., Farmer, K. The notion of the rate of profit and the stability of the market dynamics in a model with linear technology. Ann Oper Res 37, 149–167 (1992). https://doi.org/10.1007/BF02071054
Issue Date:
DOI: https://doi.org/10.1007/BF02071054