Rodolfo Signorino

Rational vs historical reconstructions. A note on Blaug

The paper focuses on Blaugs distinction between rational and historical reconstruction within the historiography of economics. Blaugs distinction is shown to be sterile and misleading and his definitions of no avail to clear thinking. Historical reconstruction (as defined by Blaug) is en empty box for reasons which are basically theoretical and not simply practical (as Blaug seems to hold). Moreover, Blaugs primary polemical target is Whig historiography and not rational reconstruction: the two concepts coincide only by means of an ad hoc definition. Blaugs criticism does not apply to other uses of the concept of rational reconstruction such as that proposed by Lakatos.

Piero Sraffa's lectures on the advanced theory of value 1928–31 and the rediscovery of the classical approach

Abstract Sraffas Lectures on the Advanced Theory of Value 1928–1931 and his two preparatory Notes of summer and November 1927 provide a wealth of material, up to now unpublished, for a reconstruction of the early stage of his inquiry into the cognate fields of pure economic theory and its history. The three manuscripts show that in the late 1920s Sraffa rejected the Marshallian constant-cost interpretation of classical economics, an interpretation to which he had adhered in his 1925 and 1926 papers. Moreover, in the Lectures, Sraffa presents for the first time his own interpretation of classical economics based on the concepts of surplus, physical real costs and asymmetric treatment of distributive variables.

Method and analysis in Piero Sraffa's 1925 critique of Marshallian economics

This paper provides an analysis of the logical structure and analytical content of Piero Sraffas 1925 Italian paper, ‘Sulle relazioni fra costo e quantità prodotta’. It shows that Sraffas criticism of the supply side of Marshalls theory of value in a competitive partial equilibrium model involves analytical and methodological issues. Endorsing an agressive methodology Sraffa logically reconstructs Marshalls model on variable returns to determine its empirical domain. He demonstrates that the latter encompasses only the empirically irrelevant cases of specific factor industries and specific external economies industries and that it cannot be generalized to non-specific factor industries and to non-specific external economies industries.

Defense versus Opulence? An Appraisal of the Malthus-Ricardo 1815 Controversy on the Corn Laws

This article proposes a rational reconstruction of the arguments of Malthus and Ricardo in their 1815 essays, Grounds of an Opinion and An Essay on Profits, whereby a policy of free corn trade was repudiated and endorsed, respectively. Malthus envisaged defense and (trade-induced) opulence as two mutually alternative options and, if required to make a choice, he had no hesitation in choosing the former. By contrast, Ricardo excluded any such trade-off, arguing that even in the case of war or poor domestic harvest, foreign agricultural countries would be seriously damaged if they opted for restrictions on their corn exports to Great Britain.

An appraisal of Piero Sraffa's 'The Laws of Returns under Competitive Conditions'

The paper proposes a new interpretation of Sraffas 1926 Economic Journal article, ‘The Laws of Returns under Competitive Conditions’, according to which the latter derives from the same strategy of research which underlies its 1925 Italian precursor, ‘Sulle relazioni fra costo e quantità prodotta’. Sraffa tested the explanatory power of a Marshallian monopolistic partial equilibrium model and concluded that that model is able to treat one source of variable returns (firm-internal economies); but this articulation of Marshall‘s theory does not substantially improve on the trade-off between logical consistency and empirical relevance which afflicted the theory in its whole.

economics in the mirror of the financial crisis

The structure of the Chapter is as follows. In Section 2 I discuss some of the factors that may have played a role in causing the crisis and emphasise that supporters of different economic theories will assign different weights to each factor in their analyses. As a consequence, suggested economic policies are highly sensitive to the economic theory employed in evaluating the set of causes. In Section 3 I seek to defend economists from the common charge that their inability to foresee the crisis is a clear sign of the lack of scientific status of their discipline. In my view, the main liability of mainstream economics lies elsewhere, in its excessive trust on the self-equilibrating mechanisms of free-market economies. Mainstream macroeconomists, enamoured of the efficient financial markets hypothesis, may have been too hasty in dismissing the financial instability hypothesis proposed by Keynes and developed by Minsky. Section 4 briefly outlines Keynes’s and Minsky’s contribution on this subject while Section 5 concludes.

How to pay for the war in times of imperfect commitment: Adam Smith and David Ricardo on the sinking fund.

Abstract The paper proposes a comparative analysis of Smiths and Ricardos views on the sinking fund. It shows that Smith and Ricardo agreed in stressing the ineffectiveness of the sinking fund as a policy instrument targeted at public debt repayment and tax-burden relief, pointing out that its actual workings had paradoxically helped to increase rather than reduce British total debt-load. Moreover, their explanation of the sinking fund paradox integrates a defective fiscal commitment technology with powerful politicians’ incentives to siphon off the money stored in the sinking fund to meet sudden increases of public expenditure whenever the occasion arose.

On the Limits to the Long-Period Method in Classical Economics: A note

On a first reading of Theory of Production, Kurz & Salvadori (1995) appear to confine the empirical domain of the long-period models of the classical theory of value and distribution to stationary economies with non-constant returns to scale and to growing economies with constant returns to scale. Such a reading is shown to be untenable since it merges the two levels of exploring the extension of a model and of testing a theoretical hypothesis. Conversely, the way Kurz & Salvadori tackle the problems of price dynamics and returns to scale in growing economies is shown to be compatible with what appears to be Sraffas (implicit) strategy of research.