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Title:Classical macrodynamics and the labor theory of value PDF Logo
Authors:Wright, Ian
Issue Date:2011
Series/Report no.:Open Discussion Papers in Economics, The Open University 76
Abstract:This paper outlines a multisector dynamic model of the convergence of market prices to natural prices in conditions of fixed technology and composition of demand. Prices and quantities adjust in real-time in response to excess supplies and differential profit-rates. Finance capitalists earn interest income by supplying money-capital to fund production. Industrial capitalists, as the owners of firms, are liable for profits and losses. Market prices stabilize to profit-equalizing prices of production proportional to the total coexisting labor required to reproduce commodities. This result resolves the classical problem of the incommensurability between money and labor-value accounts in conditions of profits on stock, i.e. Marx's transformation problem.
Document Type:Working Paper
Appears in Collections:Open Discussion Papers in Economics, The Open University

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