The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Centre of Gravitation

  • Luciano Boggio
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_443

Abstract

In the Classical theory concerning the price of commodities there are two notions of price: the market price, which is the price actually prevailing, and the natural price, which is equal to ‘what is sufficient to pay the rent of the land, the wages of the labour, and the profits of the stock…according to their natural rates’ (Smith 1976, p. 72); and the natural price is a centre of gravitation for the actual price, i.e. the latter is continually tending to the former.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Luciano Boggio
    • 1
  1. 1.