Labor Values, Prices of Production, and Wage-Profit Rate Frontiers of the Korean Economy

Lefteris Tsoulfidis ; Dong-Min Rieu

Associate Professor, Department of Economics, University of Macedonia, 156 Egnatia Street, P.O. Box 1592, 540 06 Thessaloniki, Greece, Tel: +30-2310-891-788 lnt@uom.gr
Associate Professor, Department of Economics, Chungnam National University, 220 Kung-dong, Taejeon 305-764, Korea, Tel: +82-42-821-5522 rieudm@cnu.ac.kr

JEL Classfication: B12, B14, C67, D57

Abstract

This paper extends the empirical analysis of the labor theory of value using input-output data from the Korean Economy for the years 1995 and 2000. The results of the analysis suggest that the Korean economy displays similarities with a number of other economies as regards to the proximity of labor values, Sraffian prices and prices of production to actual market prices. Furthermore, our findings of the wage-profit rates frontiers for the Korean Economy for the years 1995 and 2000 preclude the case of reswitching of techniques. This result lends additional support to the labor theory of value as an analytical tool for the understanding of the laws of motion of modern economies.

Keywords:

Values, Prices of production, Wage-profit rate frontiers, Input-output

Acknowledgments

We are indebted to Dr. Chang-Sik Shin of the Bank of Korea for providing the information about the vector of sectoral capital stock data. We also thank Aris Papageorgiou and two anonymous referees of this journal for helpful comments.

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