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Capital theory: Less is more

Mariolis, Theodore and Tsoulfidis, Lefteris (2016): Capital theory: Less is more.

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Capital theory and the associated with it price effects resulting from changes in the distributive variables hold centre stage when it comes to the internal consistency of both classical and neoclassical theories of value. The article briefly reviews the literature and then focuses on the detected skew eigenvalue distribution of the vertically integrated technical coefficients matrices of actual economies. The findings prompt the use of the Schur triangularization theorem for the construction even of a single industry from the input-output structure of the entire economy. Such a hyper-basic industry, in combination with hyper-non-basic industries, embodies properties that may capture the behaviour of the entire economic system. Thus, we can derive some meaningful results consistent with the available empirical evidence.

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