Long-Run Changes in the Wage and Price Mechanisms and the Process of Growth

Sylos-Labini, Paolo

doi:10.1007/978-1-349-22728-0_13

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Gravitation and Historical Periods1

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1996

2015

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Cited by 4 publications

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“…Transformational Growth and the LPM 389 deeper changes were taking place: the economy was changing its characteristic patterns of adjustment.17 (Sylos-Labini, 1993;Nell & Argyrous, 1996). In early capitalism, roughly from the Napoleonic Wars to World War I, capitalism adjusted through a price mechanism.…”

Section: Gravitation and Historical Periodsmentioning

confidence: 98%

Transformational Growth and the Long-period Method

Nell

1996

Review of Political Economy

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The long-period method rests on gravitation which, in turn, implies that the real price-quantity system adjusts in a stable manner. The process of gravitation rests on prices that are flexible in both directions, and on the willingness of investors to shift capital in response to changes in market prices. Neither are empirically present or plausible in modern conditions, though both may have characterised capitalism in its earlier stages, based on craft technology. But later capitalism-operating mass production-exhibits inflexible relative prices coupled with volatile quantities. For the Classical equations to serve as the basis for the analysis of cycles and growth in modern conditions an interpretation must be found which does not beg the question of stability. Such an approach is sketched.

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Section: Gravitation and Historical Periodsmentioning

confidence: 98%