The Sraffa System

The Sraffa system is a way to analyze how goods and services are exchanged and valued in an economy without relying on prices set by supply and demand. It uses a network of relationships showing how different industries produce goods using other goods as inputs, forming a 'matrix.' By studying this matrix, economists can understand how the distribution of resources affects overall production and income. Essentially, it provides a mathematical framework to examine economic structure and distribution without assuming that prices determine value first, offering insights into how economy-wide factors influence prices and profits.