Viable Techniques, Leontief’s Closed Model, and Sraffa’s Subsistence Economies

Alberto Benítez, Alejandro Benítez

Abstract


This paper studies the production techniques employed in economies that reproduce themselves. Special attention is paid to the distinction usually made between those that do not produce a surplus and those that do, which are referred to as first and second class economies, respectively. Based on this, we present a new definition of viable economies and show that every viable economy of the second class can be represented as a viable economy of the first class under two different forms, Leontief‘s closed model and Sraffa’s subsistence economies. This allows us to present some remarks concerning the economic interpretation of the two models. On the one hand, we argue that the participation of each good in the production of every good can be considered as a normal characteristic of the first model and, on the other hand, we provide a justification for the same condition to be considered a characteristic of the second model. Furthermore, we discuss three definitions of viable techniques advanced by other authors and show that they differ from ours because they admit economies that do not reproduce themselves completely.


Keywords


Economic reproduction, Hawkins and Simon condition, input-output models, Leontief, Sraffa.

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DOI: http://dx.doi.org/10.18533/ijbsr.v4i11.624

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