Capital Theory and Political Economy: Prices, Income Distribution and Stability (Routledge Frontiers of Political Economy)

In recent years, there have been a number of new developments in what came to be known as the "Capital Theory Debates".The debates took place mainly during the 1960s as a result of Piero Sraffa's critique of the neoclassical theory according to which the prices of factors of production directly depend on their relative scarcities.Sraffa showed that when income distribution changes, there are many complexities developed within the economic system impacting on prices in ways which are not possible to predict.These debates were revisited in the 1980s and again more recently, along with a parallel literature that has developed among neoclassical economists and has also looked at the impact of shocks on an economy. This book summarizes the debates and issues around the theory of capital and brings to the fore the more recent developments.It also pinpoints the similarities and differences between the various approaches and critically evaluates them in light of available empirical evidence.Th