Evolutionary and Institutional Economics Review

, Volume 13, Issue 2, pp 297–322

Capital theory ‘paradoxes’ and paradoxical results: resolved or continued?

Article

Abstract

Capital theory controversies and ‘paradoxes’ showed that, due to price-feedback effects, the wage–production price–profit rate curves may display shapes inconsistent with the requirements of the neoclassical theory of value and distribution. Subsequent findings on a number of quite diverse actual single-product economies suggested that the impact of those effects is of limited empirical significance. This paper argues that, by focusing on the distributions of the eigenvalues and singular values of the system matrices, we can further study these issues and derive some meaningful theoretical results consistent with the available empirical evidence. Consequently, the real paradox, in the sense of knowledge vacuum and, thus, requiring further research, is the distributions of the characteristic values and not really the ‘paradoxes in capital theory’.

Keywords

Capital theory Characteristic value distributions Hyper-basic industry Spectral decompositions Wage–price–profit rate curves 

JEL Classification

B21 B51 C67 D57 

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Copyright information

© Japan Association for Evolutionary Economics 2016

Authors and Affiliations

  1. 1.Department of Public AdministrationPanteion UniversityAthensGreece
  2. 2.Department of EconomicsUniversity of MacedoniaThessaloníkiGreece

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