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A Puzzle about the Monetary Expression of Labor Time : An Equilibrating Mechanism or Just A Coincidence?

Author

Listed:
  • Hyun Woong Park

    (Denison University, Department of Economics)

  • Dong–Min Rieu

    (Chungnam National University, Department of Economics)

Abstract
In this paper, we report a puzzling result about the monetary expressions of labor time (MELTs) of the productive and unproductive sectors. Since part of the aggregate value produced in productive sectors is transferred to unproductive sectors, the productive sector’s MELT is a measure of value realized in productive sectors while the unproductive sector’s MELT is a measure of value transferred to unproductive sectors. Using the national income data for the U.S. economy during 1987-2016 and for the Korean economy during 1993-2016, it is found that the MELT of the aggregate productive sector and the MELT of the aggregate unproductive sector have been moving in a very close lockstep in both countries during the entire sample periods. We build a model which explicitly formalizes the unproductive sector as not producing any value but making the value production process efficient, and find that the co–movement of the two MELTs is not an optimal condition. We also suggest some ex post implications of it, including what the puzzling result implies on the relation between unproductive sector and capital accumulation.

Suggested Citation

  • Hyun Woong Park & Dong–Min Rieu, 2018. "A Puzzle about the Monetary Expression of Labor Time : An Equilibrating Mechanism or Just A Coincidence?," UMASS Amherst Economics Working Papers 2018-15, University of Massachusetts Amherst, Department of Economics.
    • Handle: RePEc:ums:papers:2018-15
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    References listed on IDEAS

    as
    1. Cecchetti, Stephen & Kharroubi, Enisse, 2015. "Why does financial sector growth crowd out real economic growth?," CEPR Discussion Papers 10642, C.E.P.R. Discussion Papers.
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    3. Erik K. Olsen, 2015. "Unproductive Activity and Endogenous Technological Change in a Marxian Model of Economic Reproduction and Growth," Review of Radical Political Economics, Union for Radical Political Economics, vol. 47(1), pages 34-55, March.
    4. Okishio, Nobuo, 2001. "Competition and Production Prices," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(4), pages 493-501, July.
    5. Dong–Min Rieu & Hyun Woong Park, 2018. "Unproductive Activities and the Rate of Surplus Value at the Industry Level in Korea, 1995–2015," UMASS Amherst Economics Working Papers 2018-07, University of Massachusetts Amherst, Department of Economics.
    6. Simon Mohun, 2006. "Distributive shares in the US economy, 1964--2001," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(3), pages 347-370, May.
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    Cited by:

    1. Hyun Woong Park & Dong-Min Rieu, 2020. "A Mathematical Formulation of the Dual Nature of Unproductive Labor," Review of Radical Political Economics, Union for Radical Political Economics, vol. 52(4), pages 716-738, December.

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    More about this item

    Keywords

    unproductive labor; monetary expression of labor time;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory

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