ppnewint5 {clptheory}

Capital stock model 1 using the New Interpretation.

Description

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

Usage

ppnewint5(A, l, w, v, Q, D, K, t, l_simple)

Arguments

A

input-output matrix (n x n).

l

vector of complex labor input (1 x n).

w

uniform nominal wage rate (scalar).

v

value of labor power (scalar)

Q

gross output vector (n x 1).

D

depreciation matrix (n x n).

K

capital stock coefficient matrix (n x n).

t

turnover times matrix (n x n diagonal).

l_simple

vector of simple labor input (1 x n).

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

Nnonneg

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

Nirred

Is N Irreducible? (1=Y,0=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 nominal wage rate
wavg <- m%*%b
# Value of labor power
v <- 2/3
# Depreciation matrix
D <- matrix(data = c(0,0,0,0.00568,0.0267,0.0028,0.00265,0.0147,0.00246),
nrow=3, ncol=3, byrow = TRUE
)
# Capital stock coefficient matrix
K <- matrix(
data = c(0,0,0,0.120,0.791,0.096,0.037,0.251,0.043),
nrow=3, ncol=3, byrow = TRUE
)
# Diagonal turnover matrix
t <- diag(c(0.317, 0.099, 0.187))
# Compute prices of production
ppnewint5(A = A,l = l,w = wavg[1,1],v=v,Q = Q,l_simple = l,D=D,K=K,t=t)