Dumenil-Levy and Foley (DLF) attempt to show that the falling rate of profit can be induced by applying Okishio's criterion of technical choice to DLF's framework on the evolution of potential technical change. This paper examines what would happen if Shaikh's criterion is applied to DLF's framework on the evolution of potential technical change. The following result is derived: while both criteria induce the K/L (capital-labor ratio) — increasing falling rate of profit at a sufficiently high wage share, only Shaikh's criterion induces the K/L — increasing falling rate of profit under a constant real wage (or a low wage share).
Park, C. (2001), "Criteria of technical choice and evolution of technical change", Zarembka, P. (Ed.) Marx's Capital and Capitalism; Markets in a Socialist Alternative (Research in Political Economy, Vol. 19), Emerald Group Publishing Limited, Bingley, pp. 87-106. https://doi.org/10.1016/S0161-7230(01)19005-XDownload as .RIS
Emerald Group Publishing Limited
Copyright © 2001, Emerald Group Publishing Limited