clptheory (version 0.1.0)

ppnewint2: Circulating capital model 2 using the New Interpretation.

Description

This function computes the uniform rate of profit, prices of production and labor values for a circulating capital model using the New Interpretation. The model allows differential wage rates across industries but does not take account of unproductive labor for labor value calculations.

Usage

ppnewint2(A, l, w, v, Q, l_simple)

Value

A list with the following elements:

meig

Maximum eigen value of A

urop

Uniform rate of profit (as a fraction)

mrop

Maximum rate of profit (as a fraction)

ppabs

Price of production vector (absolute)

pprel

Price of production vector (relative)

lvalues

Labor values vector

mevn

Monetary expression of value using net output

mevg

Monetary expression of value using gross output

Anonneg

Is A Nonnegative? (1=Y,0=N)

Airred

Is A Irreducible? (1=Y,0=N)

Arguments

A

input-output matrix (n x n).

l

vector of complex labor input (1 x n).

w

vector of nominal wage rates (1 x n).

v

value of labor power (scalar)

Q

gross output vector (n x 1).

l_simple

vector of simple labor input (1 x n).

References

Basu, Deepankar and Moraitis, Athanasios, "Alternative Approaches to Labor Values andPrices of Production: Theory and Evidence" (2023). Economics Department Working Paper Series. 347. URL: https://scholarworks.umass.edu/econ_workingpaper/347/

Examples

# ------ Data
# Input-output matrix
A <- matrix(
data = c(0.265,0.968,0.00681,0.0121,0.391,0.0169,0.0408,0.808,0.165),
nrow=3, ncol=3, byrow = TRUE
)
# Direct labor input vector (complex)
l <- matrix(
data = c(0.193, 3.562, 0.616),
nrow=1
)
# Real wage bundle
b <- matrix(
data = c(0.0109, 0.0275, 0.296),
ncol=1
)
# Gross output vector
Q <- matrix(
data = c(26530, 18168, 73840),
ncol=1
)
# Direct labor input vector (simple)
l_simple <- l
# Market price vector
m <- matrix(data = c(4, 60, 7),nrow=1)
# Uniform wage rate
wavg <- m%*%b 
# Vector of nominal wage rates
w <- matrix(data=c(wavg-0.5,wavg,wavg+0.5),nrow=1)
# Value of labor power
v <- 2/3
# Compute prices of production
ppnewint2(A = A,l = l,w = w[1,],v=v,Q = Q,l_simple = l)