ABSTRACT OF PAPER
Title: A New Interpretation of the Price Wicksell Effect
Author: YAGI Takashi
In this paper, we will consider the value of aggregate capital and the price Wicksell effect and introduce our definition of aggregate capital and a new interpretation of the price Wicksell effect. We will distinguish the actual capital and the standard capital corresponding to the Standard system. The difference between them comes from the difference in the composition of output. Moreover, we will distinguish the wage in case that the physical income is constant, and the wage in case that the general price level is constant. This distinction enables us to explain the cause of the price Wicksell effect discussed in the Cambridge capital controversies. In this paper, two different techniques, Technique α and Technique β, are considered and let us take Technique α as base. The difference of social productivity between them is measured by the Standard productivity index, and the difference of the general price level is calculated by the Standard price index. Then we will show in our model that the price Wicksell effect is zero or neutral for Technique α, while, for Technique β, the price Wicksell effect may become positive or negative.
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