On the Inconsistence between the Long-Period Method and the Assumption of Given Quantities

Abstract:     
According to Sraffian economists, both the aggregate and the general equilibrium versions of the neoclassical theory suffer from a logical inconsistence that prevents them from identifying a long-period position. The aim of this paper is to show that also Sraffa’s approach, based on the assumption of given sectoral outputs, brings about an inconsistence between his theory and the long-period method. The main upshot of our argument is that sectoral outputs can legitimately be left to a separate stage of the theory only insofar as the long-period method is dropped and the classical-type theory is reconstructed within the temporary equilibrium method.

Number of Pages in PDF File: 18

Keywords: classical-type approach, Sraffian theory, long period, short period, temporary equilibrium

JEL Classification: D11, D21, B12, B41

working papers series