Basic Commodities and Multiple Interest Rate Analysis

34 Pages Posted: 8 Dec 2016  

Robert L. Vienneau

Independent

Date Written: December 8, 2016

Abstract

This paper considers the application of multiple interest rate analysis to a model of the production of commodities by means of commodities. A polynomial, for the characteristic equation of the augmented input-output matrix, is used in defining the rate of profits in such a model. Only one root is found to be economically meaningful. No non-trivial application of multiple interest rate analysis is found in the analysis of the choice of technique. On the other hand, multiple interest rate analysis can be used in defining Net Present Value in an approximate model, in which techniques are represented as finite series of dated labor inputs. The product of the quantity of the first labor input and the composite interest rate approaches, in the limit, the difference between the labor commanded by and the labor embodied in final output in the full model.

Keywords: Net Present Value, Internal Rate of Return, Choice of Technique, Reswitching, Cambridge Capital Controversy

JEL Classification: B24, C63, D24, E43, G11, G31

Suggested Citation

Vienneau, Robert L., Basic Commodities and Multiple Interest Rate Analysis (December 8, 2016). Available at SSRN: https://ssrn.com/abstract=2882531 or http://dx.doi.org/10.2139/ssrn.2882531

Robert L. Vienneau (Contact Author)

Independent ( email )

209 Maple Street
Rome, NY 13440
315-336-5417 (Phone)
315-334-4964 (Fax)

Paper statistics

Downloads
21
Abstract Views
232