2018•The New Palgrave Dictionary of EconomicsRequires access
Choice of Technique and the Rate of Profit
N. Okishio
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Abstract
In a capitalistic economy the main production decisions are made by private capitalists. The choice of technique is one of the decisions in their hands, and the criterion for that choice is to maximize the expected profit rate. In order to calculate that rate they must have expectations of the prices of various commodities, and of the wage rate.