No. 1003: Where do competitive prices go? The long run behaviour of a neoclassical production economy, and the classical prices of production
Naoki Yoshihara Department of Economics, University of Massachusetts; Graduate School of Economics and Management, Tohoku University Roberto Veneziani School of Economics and Finance, Queen Mary University of London
June 26, 2026
Abstract
We analyse a general, dynamic neoclassical production economy. We show that any sequence of competitive equilibrium prices converges to a vector of production prices. Thus, far from being a special case, classical prices of production are the attractor of neoclassical equilibrium prices. Indeed, and this is a second insight, prices of production turn out to be the (unique) supporting price vector of the turnpike capital accumulation path. Finally, our results have some implications for theories of exploita-tion and class, and distributive justice more generally.
J.E.L classification codes:
Keywords: Neoclassical Production Economies; Prices of Produc-tion; Intertemporal Walrasian Equilibrium Prices; Euler Equation.