1. Neo-Ricardian View of Production, Value and Distribution Piero Sraffa (1960) - dd does not affects prices; rather it affects only the scale of output in each industry; prices (goods) depend on the factors of production (shares of other commodities necessary to produce them; Prices and profits are determined by the production techniques; change in wages or profit affects inputs exactly the same way that it affects the output; the actual dist. of income bet wages and profits depend on the class struggle, on public policies that alter the distribution & on the rate of investment; it is desirable & possible for society to control the dist of income - public ownership of means of prod & income policies 2. Markup Pricing Prices are set by oligopolistic corporations; finance investment largely from retained profits; oligopolistics set prices above current costs. Prices do not reflect dd conditions rather they reflect the funds requirements for the planned investment to meet future dd; when cost rise, firms increase their prices to maintain their markups over their costs. 3. Endogenous Money the need of trade dictate the supply of money. Wage increases cause prod costs to rise, creating a greater demand from firms for working capital to finance their more expensive goods-in-progress and inventories. Hence, business borrowing rises and the money stock increases. 4. Pronounced Cyclical Instability the economy is inherently unstable. investment must grow sufficiently to keep national income and output growing at a steady rate. but if often does not. 5. Need for Income Policies the class struggle for income shares and the markup pricing by oligopolists necessitate a permanent incomes policy; New Keynesians During the 1990's, there was a resurgence of economists labeling themselves Keynesians - the new Keynesians. Modern Keynesians or New Keynesians reject the neo-ricardian value theory of the post-Keynesians. Rejected incomes policies, ci