Competition and demand-led growth: linking different parts of the Sraffian-inspired research program
Year: 2025
Type: article
Abstract: Connections between two distinct lines of enquiry in the broader Sraffian research program are examined. A multi-commodity simulation demand-led growth model highlights a first connection: classical competition acting as a perturbation of the process by which capacity adapts to aggregate demand. The implied view of target return pricing is however criticised. Corporate pricing literature points to a more nuanced view of target return pricing as well as a different view of capital mobility compared with the literature on gravitation. Using the target return price equations of the simulation model and the insights from literature allows one to identify the kinds of factors which would generate profit differentials sufficient to trigger intersectoral capital mobility. In turn this highlights a second connection with the demand-led growth literature: the importance of ‘normal’ conditions and changes in autonomous demand as one factor generating relevant profit differentials and structural changes via intersectoral capital mobility.
Author: Graham White
Institution: The University of Sydney
Language: English
Topic: Economic Theory and Policy
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,880
OpenAlex ID: W4412053295