Creating Two-Good Reswitching Examples
16 Pages Posted: 9 Apr 2005
Date Written: August 2005
The Cambridge Capital Controversy is a long-lasting dispute over the validity and internal coherence of neoclassical theory. A number of textbooks are available to help teach the controversy. Some of these textbooks contain exercises and numeric examples. An important part of the controversy centered on the phenomena of reswitching and capital-reversing, and some of these textbook exercises illustrate these phenomena. This paper is directed towards those who want to create their own simple examples of reswitching in two-commodity models. It shows how to construct such numeric examples, given the maximum wage and switch points for two wage-profits curves that reswitch.
Keywords: Undergraduate Economics Education, Sraffian Economics, Input-Output Models, Input-Output Tables and Analysis, Capital Theory, Production Theory
JEL Classification: A22, B51, C67, D57, E22, E23
Suggested Citation: Suggested Citation