Page 22 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 1, 2016, pp. 4-37

originating from raw sources and added materials decreases as the labor production,
relating to such materials increases. Reversely, the capital increases in its greater part, -
and that is, - more of characteristics relating to the increase in the labor production force
since, at the same time, the component of the cost of capital which is shifted onto the
goods increases, as the capital decreases in value with the passage of time. For the new
production method to increase the volume of production, it should, in the course of
capital depreciation, shift that part of its cost, which is smaller than one, saved at the
cost of the decrease in the physical labor. In other words, this method should decrease
the cost of goods. It is obvious that the above stated should also occur when the cost is
created from the added cost, commensurate to the more expensive types of raw
resources which increase in quantities. All the additions to the cost should be made
equal by means of the decrease in their costs, entailing from the decrease in the physical
labor [Pikkety, T.,2015].‖
In accordance with those well known comments by F. Engels, the coherence in
the ratios of capital indicators, in the form of money (Y=V+M), and capital, in the
form of goods, (Х = C+V+M) will become the basis to the solution by A. Granberg
of his problem set with the sub-tasks on the decreasing materials intensity of the
gross domestic product. In other words, it is necessary to ensure coherence in the
indicators of the nominal GDP (NGDP=Y), which defines the cost of the final
product and the indicators of the gross aggregate product (Х=C+V+M), consisting of
the sum of costs, including materials costs needed for production of the set volume
of the final product in the form of the annual income (Y=V+M).
Without the analysis of this binary set of indicators, the solution of the
Granberg problem set seems to be impossible. The paradox, associated with the the
Granberg problem is in the set of indicators and criteria relating to the real growth
rates, which until the demise of the former soviet system, still remained disputed. In
fact, those indicators tended to change from time to time.
Thus, the so called indicator of ―gross product‖ had served in ex-soviet times
as an estimate of economic growth. As with the same discussion topic, the ex-soviet
economic school was divided into several groups. It needs noting that amongst the
Russian economic scientists the same dispute goes on, until now. The real GDP
structure, which has ‗mechanically‘ been shown to countries of the Commonwealth
of Independent States for using it as a pattern, now serves as the current criterion of
economic growth.
However, recently the world has acquainted itself with Thomas Picketty‘s
book where the notions of inflation (to be construed as the GDP deflator) and real
economic growth (to be construed as the real GDP) ―have not always been defined
correctly‖ and that the breakdown of the nominal growth into real and inflation-

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