Extending the W. Leontief's model by limiting the production system material resource – The objectivist concept of value

Abstract

Subject. This article deals with the issues related to the definition of the laws of pricing, as well as to the W. Leontief's economic circulation concept development. Objectives. The article aims to determine the principles of the objectivist concept of value on the basis of the analytical apparatus of the input-output method and build a mathematical model of price formation. Methods. For the study, I used the methods of logical and mathematical analyses. Results. The article formulates the principle of formation of prices of production products in terms of the concept of economic circulation developed by W. Leontief, on the basis of limiting the volume of physical resources of the economic system. Conclusions. The solution of the problem of value within the framework of the input-output concept is possible, and this solution in terms of simplicity and commonality of initial prerequisites, is not inferior to the W. Leontief's economic circulation principle. The input-output concept, taking into account this addition, should be considered not just as an analytical tool, but a complete macroeconomic theory of production, as well.