ppnewint1: Circulating capital model 1 using the New Interpretation.

In clptheory: Compute Price of Production and Labor Values

Circulating capital model 1 using the New Interpretation.

Description

This function computes the uniform rate of profit, prices of production and labor values for a basic circulating capital model using the New Interpretation. The model has uniform wage rates across industries and does not take account of unproductive labor for labor value calculations.

Usage

ppnewint1(A, l, w, v, Q, l_simple)

Arguments

A	input-output matrix (n x n).
l	vector of complex labor input (1 x n).
w	uniform nominal wage rate (scalar).
v	value of labor power (scalar)
Q	gross output vector (n x 1).
l_simple	vector of simple labor input (1 x n).

Value

A list with the following elements:

meig	Maximum eigen value of A
urop	Uniform rate of profit (as a fraction)
mrop	Maximum rate of profit (as a fraction)
ppabs	Price of production vector (absolute)
pprel	Price of production vector (relative)
lvalues	Labor values vector
mevn	Monetary expression of value using net output
mevg	Monetary expression of value using gross output
Anonneg	Is A Nonnegative? (1=Y,0=N)
Airred	Is A Irreducible? (1=Y,0=N)

References

Basu, Deepankar and Moraitis, Athanasios, "Alternative Approaches to Labor Values andPrices of Production: Theory and Evidence" (2023). Economics Department Working Paper Series. 347. URL: https://scholarworks.umass.edu/econ_workingpaper/347/

Examples

# ------ Data
# Input-output matrix
A <- matrix(
data = c(0.265,0.968,0.00681,0.0121,0.391,0.0169,0.0408,0.808,0.165),
nrow=3, ncol=3, byrow = TRUE
)
# Direct labor input vector (complex)
l <- matrix(
data = c(0.193, 3.562, 0.616),
nrow=1
)
# Real wage bundle
b <- matrix(
data = c(0.0109, 0.0275, 0.296),
ncol=1
)
# Gross output vector
Q <- matrix(
data = c(26530, 18168, 73840),
ncol=1
)
# Direct labor input vector (simple)
l_simple <- l
# Market price vector
m <- matrix(data = c(4, 60, 7),nrow=1)
# Uniform nominal wage rate
wavg <- m%*%b
# Value of labor power
v <- 2/3
# Compute prices of production
ppnewint1(A = A,l = l,w = wavg[1,1],v=v,Q = Q,l_simple = l)

clptheory documentation built on April 4, 2023, 5:15 p.m.