Freeing long-period prices from the uniform profit rate hypothesis: A general model of long-period positions

Modern long-period literature defines long-period prices as prices yielding a uniform profit rate. This definition relies on the assumption of free competition, which is not essential in defining long-period prices, the reproducibility of the economic system being the essential condition. A definition of long-period prices based only on reproducibility is then proposed and a model developed. The existence of long-period price vectors is obtained in a variety of situations yielding differential or uniform profits rates. Our analysis shows that the long-period approach is robust with respect to the elimination of the significant but problematic assumption of uniform profit rates. Our model provides also a formalization of Smith's view of domestic and international division of labour.