Please use this identifier to cite or link to this item: http://arl.liuc.it/dspace/handle/2468/6514
Title: Secular decline in profit rates: time series analysis of a classical hypothesis
Authors: Trofimov, Ivan D.
Issue Date: 2018
Publisher: European Association for Comparative Economic Studies (EACES)
Università Carlo Cattaneo - LIUC
Bibliographic citation: Trofimov Ivan D. (2018), Secular decline in profit rates: time series analysis of a classical hypothesis. In: The European journal of comparative economics, vol. 15, n. 1, 2018, p. 83-118. E-ISSN 1824-2979. DOI 10.25428/1824-2979/201801-83-118.
Abstract: Recent global financial crisis and ongoing turbulence in the global economy revived interest in the classical hypothesis of declining profit rates and vanishing profit opportunities as one of the reasons of economic instabilities. This paper, while not joining theoretical debate on the driving factors of profit rates’ decline, reconsiders empirically the hypothesis of the secular decline in economy-wide profit rates. A panel of unit root tests is used and deterministic and stochastic trend models (with or without structural breaks) are estimated. It is shown that instead of continuous downward trend, profit rates exhibit diverse dynamics – random walk, deterioration with breaks, reversals, or the absence of trend. Likewise, it is shown in an exploratory analysis that a variety of factors were determining profit rates, with capital productivity and competitive dynamics in the economy likely being the most salient.
URI: http://arl.liuc.it/dspace/handle/2468/6514
Journal/Book: The European journal of comparative economics
Appears in Collections:EJCE

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