Recurrence: A Neglected Aspect of the Sraffian Critique of Marginalism
13 Pages Posted: 3 Jun 2016
Date Written: July 2016
The significance of ‘reswitching’ - that great symbolic issue of the Cambridge capital debates - has sometimes been denied on the ground of a low probability. This article investigates the industry‐level return, in different equilibria, of the use of one or more (or all) inputs. Such phenomena, which we call ‘recurrence’, are generically far more probable than the return of a whole economy‐level technique and can be triggered, not only by a change in the interest rate, but also by a change in relative primary input prices. Since recurrence alone, without reswitching, is damaging to standard marginalist conceptions, one should not attribute too much importance to any low ‘probability of reswitching’.
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