ECO 3132 Lecture Notes - Lecture 14: Transformation Problem
12 Dec 2017
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Marx pricing formula: the relative price si the ratio between p1 and p2, but the relative values are y1/y2, these raltive prices of production and labour values are equal to each other when sigma. This is similar to ricardo: p1>y1 when sigma i > sigma and vice versa p =price of production and y= labour. The table. s/c=v would give us the rate of profit. Critics: ricardo sets prices by by (1+r, the problem is the inputs, theyre in labour values which mean theyre not in dollar values. Were trying to transform the outputs but not the inputs. Simple reproduction: y today is equal to y in future period, the future y will exceed today y.
