Disequilibrium and Reproduction Prices: Some Extensions of Sraffa’s Model

Abstract

According to the preface of Production of Commodities by Means of Commodities (1960), ‘no changes in output’ are considered in Sraffa’s model and, according to Section 4, the rate of profit ‘must be uniform for all industries’.¹ Sraffa’s formalisation and ideas have now been studied for more than 50 years and have inspired a huge branch of literature which attempts to extend his basic model and to combine it with other economic ideas endorsed by the Classicals. For instance, many contemporary models deal with steady growth (the rates of accumulation are uniform among industries); others analyse the ‘gravitation process’ mentioned by Smith and Ricardo and wonder if the market prices, which generate differentiated rates of profit, do cycle around (or converge towards) natural prices.