Regularities in Prices of Production and the Compositions of Capitals

Luis Daniel Torres Gonzalez
Written By SCEPA

WORKING PAPER

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This paper argues that the combined effect of regularities in prices of production and the concentration of compositions of capitals produces the empirical regularities in relative prices.

The tendency of the vertically integrated labor to means of production proportions to cluster around their average reveals the existence of an economic force acting on the structure of technology of observable economies and calls for an explanation. The paper relies on the US 1987- 2007 Input-Output accounts, at the highest disaggregation level (between 370-466 sectors), for the empirical evidence in this paper.

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