41 research outputs found
Natural rates of profit, natural prices, and the actual economic systems - a theoretical framework
The aim of the present paper is that of exploiting the notions of vertically (hyper-)integrated sectors, as discussed in Pasinetti (1973) and Pasinetti (1988), and of natural system, as defined in Pasinetti (1981), in order to build up an analytical framework in which data from national accounts can be consistently inserted and hence used to analyse actual economic systems. Pasinetti (1981) built up an analytical framework in which the economy is divided into as many vertically (hyper-)integrated sectors as there are consumption goods. Each vertically integrated sector is summarised, as explained in Pasinetti (1973), by a composite commodity — a unit of vertically integrated productive capacity — made up by all the goods that enter, both directly and indirectly, the production of the corresponding consumption good, and a unit of vertically integrated labour, i.e. the quantity of labour that directly and indirectly enters the production of the consumption goods. Being the model developed in Pasinetti (1981) a vertical integrated model, there is a link between it and the analytical formulations provided by Pasinetti (1973) and Pasinetti (1988). However, such an analytic link has not been singled out explicitly, thus making it difficult to use the model itself for empirical purposes. The aim of the present paper is therefore precisely that of making this further step, in order to set up a theoretical framework which can be fruitfully used for empirical analyses of actual economic systems.Natural system, vertical integrated sectors, functional income distribution, natural rates of profit, natural prices.
Pasinetti’s Structural Change and Economic Growth: a conceptual excursus
A clear and organic exposition of Pasinetti’s theoretical framework of Structural Change and Economic Growth is often complicated by misunderstandings and ambiguities concerning the basic categories and terminology. The pre-institutional character of the approach, the nature of its equilibrium paths and the significance of the ‘natural’ economic system — together with its normative character — are some of the most controversial issues. In particular, there seems to be a need for a clearcut distinction between the general dynamic analysis of the price and quantity systems and the specific dynamics they follow when the sectoral proportions and levels of production exactly satisfy dynamic equilibrium conditions, and a particular closure of the price system is adopted, providing for specific functional income distribution and theory of value. The aim of the present paper is therefore that of attempting at a conceptual excursus of the model, in order to establish a solid ground on the basis of which discussions with other Classical approaches can be fruitfully held.Vertically (hyper-)integrated sectors, functional income distribution, ‘natural’ economic rates of profit, ‘natural’ economic system, pure labour theory of value.
Natural rates of profit, natural prices, and the actual economic systems - a theoretical framework
The aim of the present paper is that of exploiting the notions of vertically (hyper-)integrated sectors, as discussed in Pasinetti (1973) and Pasinetti (1988), and of natural system, as defined in Pasinetti (1981), in order to build up an analytical framework in which data from national accounts can be consistently inserted and hence used to analyse actual economic systems.
Pasinetti (1981) built up an analytical framework in which the economy is divided into as many vertically (hyper-)integrated sectors as there are consumption goods. Each vertically integrated sector is summarised, as explained in Pasinetti (1973), by a composite commodity — a unit of vertically integrated productive capacity — made up by all the goods that enter, both directly and indirectly,
the production of the corresponding consumption good, and a unit of vertically integrated labour, i.e. the quantity of labour that directly and indirectly enters the production of the consumption goods.
Being the model developed in Pasinetti (1981) a vertical integrated model, there is a link between it and the analytical formulations provided by Pasinetti (1973) and Pasinetti (1988). However, such an analytic link has not been singled out explicitly, thus making it difficult to use the model itself for empirical purposes.
The aim of the present paper is therefore precisely that of making this further step, in order to set up a theoretical framework which can be fruitfully used for empirical analyses of actual economic systems
The Solow–Pasinetti debate on productivity measurement: Review and reformulation
It is beyond doubt that Solow's proposal for "an elementary way of segregating variations in output per head due to technical change from those due to the availability of capital per head" (Solow, 1957, p. 312) leading to the 'residual', and hence, TFP growth, has been a crucial development of Neoclassical economics. This notwithstanding, the critique of (and alternative to) Solow's proposal advanced by Pasinetti (1959) has not been equally acknowledged. The debate re-emerged when a posthumous note by Richard Stone (1998[1960]) triggered a further exchange between the authors. This paper aims at retracing the key conceptual aspects of the discussion, pointing to some limitations of Pasinetti's original implementation of his measure of productivity changes, and providing an Input-Output generalisation based on Pasinetti's notion of hyper-integrated labour. Seen in this light, Pasinetti's computable measure of technical change provides a theoretically sound alternative to perform productivity analyses from a Classical perspective
Structural Change and Economic Growth: Production in the Short Run — A generalisation in terms of vertically hyper-integrated sectors
Pasinetti’s (1981) Structural Change and Economic Growth provides a complete and far reaching theoretical framework for the study of structural change, and therefore of economic development, rooted in in the Classical-Sraffian
tradition.
Some attempts have been made, both in the ’80s — for instance Siniscalco (1982) and Momigliano & Siniscalco (1986) — and more recently — e.g. Montresor & Vittucci Marzetti (2007a) and Montresor & Vittucci Marzetti (2008) — to use this framework for empirical purposes. However, all these attempts are based on Pasinetti’s (1973) paper, i.e. on vertically integrated analysis. It is my contention
that, as a consequence, they failed to recognise, and therefore to take advantage of, the main analytical feature of the 1981 book, namely vertical hyper-integration.
Actually, when trying to overcome the simplifying assumptions made by Pasinetti (1981) as regards the description of the technique, the starting point should
be Pasinetti (1988), and not Pasinetti (1973), the latter being an intermediate step leading to the former.
The aim of the present paper is therefore, first of all, that of highlighting the key differences between Pasinetti (1973) and Pasinetti (1988), in order to show Pasinetti’s (1981) vertically hyper-integrated character.
In the second place, the whole analytical framework provided by Pasinetti (1981) will be generalised by reintroducing inter-industry relations and allowing for more complex dynamics of economic magnitudes.
This conceptual clarification and analytical generalisation is intended to be the first step of a line of research aiming at using, and extending, the present framework to perform empirical analyses and study the behaviour of actual economic systems
International division of labour and countries’ competitiveness: the case of Italy and Germany
The paper is going to use the WIOD to analyse the structure, extent and evolution of production processes outsourcing in Italy and Germany from 1995 to 2011 by means of global vertically integrated sectors, in order to single out and compare the different sources of gains/losses in competitiveness.
Secondly, global vertically integrated sectors are going to be employed to get a measure of labour productivity changes in the two countries. By comparing the trends of these two sets of indicators, it is possible to shed light on the evolution of international competitiveness in the two countries, to assess the extent to which competitiveness gains/losses are associated to actual productivity increases/decreases and to what extent they are simply due to a different geographical allocation of production stages
International division of labour and countries’ competitiveness: the case of Italy and Germany
The paper is going to use the WIOD to analyse the structure, extent and evolution of production processes outsourcing in Italy and Germany from 1995 to 2011 by means of global vertically integrated sectors, in order to single out and compare the different sources of gains/losses in competitiveness.
Secondly, global vertically integrated sectors are going to be employed to get a measure of labour productivity changes in the two countries. By comparing the trends of these two sets of indicators, it is possible to shed light on the evolution of international competitiveness in the two countries, to assess the extent to which competitiveness gains/losses are associated to actual productivity increases/decreases and to what extent they are simply due to a different geographical allocation of production stages
Small fiscal multipliers do not justify austerity: a macroeconomic accounting analysis of public debt-to-gdp dynamics
In the aftermath of a crisis which has now been lasting for more than five years, the debate about the size of fiscal multipliers arouse. Whatever the estimation approach, fiscal multipliers assumed for projections are the result of extrapolations from time series data. The present contribution aims at taking a different perspective, by answering the following question: is it really necessary to know the value of fiscal multipliers to take sensible policy decisions
Structural Change and Economic Growth: Production in the Short Run — A generalisation in terms of vertically hyper-integrated sectors
Pasinetti’s (1981) Structural Change and Economic Growth provides a complete and far reaching theoretical framework for the study of structural change, and therefore of economic development, rooted in in the Classical-Sraffian
tradition.
Some attempts have been made, both in the ’80s — for instance Siniscalco (1982) and Momigliano & Siniscalco (1986) — and more recently — e.g. Montresor & Vittucci Marzetti (2007a) and Montresor & Vittucci Marzetti (2008) — to use this framework for empirical purposes. However, all these attempts are based on Pasinetti’s (1973) paper, i.e. on vertically integrated analysis. It is my contention
that, as a consequence, they failed to recognise, and therefore to take advantage of, the main analytical feature of the 1981 book, namely vertical hyper-integration.
Actually, when trying to overcome the simplifying assumptions made by Pasinetti (1981) as regards the description of the technique, the starting point should
be Pasinetti (1988), and not Pasinetti (1973), the latter being an intermediate step leading to the former.
The aim of the present paper is therefore, first of all, that of highlighting the key differences between Pasinetti (1973) and Pasinetti (1988), in order to show Pasinetti’s (1981) vertically hyper-integrated character.
In the second place, the whole analytical framework provided by Pasinetti (1981) will be generalised by reintroducing inter-industry relations and allowing for more complex dynamics of economic magnitudes.
This conceptual clarification and analytical generalisation is intended to be the first step of a line of research aiming at using, and extending, the present framework to perform empirical analyses and study the behaviour of actual economic systems
Covid-19 and Industrial Restructuring: What Future for Transnational Value Chains
The economic and health crisis triggered by the Covid‑19 pandemic leaves the European Union facing the steepest decline in production and employment since the Second World War, on top of economic fundamentals that are already fragile as a result of the disastrous effects of the double fall associated with the great financial crisis and the sovereign debt crisis.
This paper shows that, in the absence of an industrial policy aimed at changing the structure of the EU’s productive system, the transformation of global demand currently taking place will mostly benefit the Asian economy with China increasingly assuming industrial supremacy to the detriment of the US. The EU, in its turn, is going to accumulate growing gaps in terms of productive capacity within different supply chains – with the partial exception of Germany.
In order to achieve a transition that is not only environmental but also social, a European industrial policy is needed for the creation and public management of at least four industrial sectors, broadly defined: semiconductors – whose production is triggered by final demand for an extremely broad range of commodities, in particular TLC devices and personal computers; hydrogen electrolysers, solar panels and wind turbines; TLC equipment such as personal computers, smartphones, tablets – and in general connectivity devices; and public transport equipment