Fixed capital within the Sraffa framework (Q1101002)

Sraffa's idea of treating fixed capital as a ``species'' of the ``genus'' joint production is formalized. This is done by introducing some special assumptions on the input and output matrices relative to the linear description of technology. Suitable interpretations of these assumptions as referring to models of fixed capital (allowing just one machine or several jointly used machines, with or without production of scrap) with no joint production superimposed are provided. This formal apparatus is utilized to investigate the existence and the uniqueness of cost minimizing systems within the Sraffa framework. Sraffa's idea of dealing with joint production by analyzing square systems of production in order to find the cost-minimizing one [see \textit{P. Sraffa}, ``Production of commodities by means of production'', Cambridge Univ. Press (1960); \textit{B. Schefold} in: Essays on the Theory of Joint Production, ed. by L. L. Pasinetti, Columbia Univ. Press, New York (1980); and the author, ``Fixed capital within the von Neumann-Morishima model of growth and distribution'', mimeo. Catania (1986)] emerges as a valid one. It is shown that demand for consumption does not matter in determining the cost-minimizing systems, but demand for investment (i.e., the growth rate) does. The paper is completed with some numerical examples showing that some desirable properties do not hold in general.