Full-Cost Pricing in the Classical Competitive Proces

Research output: Contribution to journalArticle

Abstract

In the last 10-15 years a lot of attempts have been devoted to study the classical process of convergence of "market prices" toward "natural prices". The two forces that one has thought could achieve this target were capital mobility, that determines the dynamics of output, and demand-supply forces, that determines the dynamics of prices. In this article a model of classical competition is proposed in which a full-cost pricing mechanism is adopted in the rule of evolution of market prices. An asymptotical stability result of long-run equilibrium is proved for a two-commodity model with and without a final demand.
Original languageEnglish
Pages (from-to)41-54
Number of pages14
JournalJOURNAL OF ECONOMICS
Publication statusPublished - 1997

Keywords

  • capital mobility
  • capitalistic competition
  • full-cost pricing
  • gravitation
  • long-run equilibrium
  • market prices
  • natural prices

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