  The possibility of re-switching of techniques in Piero Sraffa's intersectoral
model, namely the returning capital-intensive techniques with monotonic changes
in the profit rate, is traditionally considered as a paradox putting at stake
the viability of the neoclassical theory of production. It is argued here that
this phenomenon can be rationalized within the neoclassical paradigm. Sectoral
interdependencies can give rise to non-monotonic effects of progressive
variations in income distribution on relative prices. The re-switching of
techniques is, therefore, the result of cost-minimizing technical choices
facing returning ranks of relative input prices in full consistency with the
neoclassical perspective.
