Choice of technique in a model with fixed capital

Normal utilization rate in the Sraffa framework

“…Even if transferable machines are ruled out, the cost‐minimizing technique may not be independent of economic growth when old machines are jointly utilized (Salvadori, 1988a; 1988b). The determination of a cost‐minimizing technique is independent of demand if one of the following assumptions holds: (a) all machines always work with constant efficiencies (e.g., Roncaglia, 1978; Sraffa, 1960); (b) old machines are not transferable, nor jointly utilized (Baldone, 1980; Schefold, 1980; Varri, 1980; Kurz & Salvadori, 1994); (c) old machines are not allowed to be jointly utilized and the efficiencies of transferable machines are independent of the sectors in which the machines are used (Salvadori, 1999). The model provided by Kurz and Salvadori (1995, Chapter 7, Section 7) is in line with the first assumption.…”

A Fixed Capital Model with Transferable and Jointly Utilized Machines in the Sraffa Framework

“…The former criterion concerns whether or not a machine is jointly utilized with other machines in the same process, while the latter concerns whether or not a machine is used in different sectors. Therefore, a fixed capital model can be a non‐transferable, non‐jointly utilized machines model (which will be called the non‐transferable single machine model in this article), as in Sraffa (), Baldone (), Schefold (), Varri (), Kurz and Salvadori (, chap. 7), or a non‐transferable jointly utilized machines model, following Roncaglia (), Salvadori (), Kurz and Salvadori (, chap.…”