Full text: Konvolut Regression

8 
Now Aq* = A Iq* from (5) 
so that we have 
R 
1 + R 
I q* 
( 10 ) 
as an expression for the net product in terms of standard commodity• 
Since the unit of standard commodity has been linked to the amount of 
direct labour used in the economy, we can also define the net product in 
terms of labour as 
1 + R 
To get a measure in terms of money value we have to introduce a price 
vector. We are, in principle, free to choose any price system we want, 
the essential properties of the standard commodity being preserved in 
whatever terms of money we express it. 
For example, we may choose the prices corresponding to the maximum rate 
of profit p* (the left hand eigen vector of A). We obtain the net 
product in terms of p* prices, which, following Sraffa, we equate to 
unity making it thereby the unit of the pricing system:1) 
p* 1 (I - A ) q* 
(12 ) 
It will be noted that the non-basics do not explicitly occur in this 
product, because A refers only to basics. The non-basics are taken 
account of by the equation (1a) which allocates the total labour of the 
original system (which contains the non-basics) to the basics only. That
	        

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