Profit rates in the developed capitalist economies: a time series investigation
This paper examines whether there is empirical evidence to support the hypothesis of a secular decline in the economy-wide profit rates, as predicted by classical economic theories. We specifically consider profit rates in the OECD economies based on the national accounts data contained in the Exte...
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2017-07-01
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| Series: | PSL Quarterly Review |
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| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/13907 |
| _version_ | 1811172561813241856 |
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| author | Ivan D. Trofimov |
| author_facet | Ivan D. Trofimov |
| author_sort | Ivan D. Trofimov |
| collection | DOAJ |
| description |
This paper examines whether there is empirical evidence to support the hypothesis of a secular decline in the economy-wide profit rates, as predicted by classical economic theories. We specifically consider profit rates in the OECD economies based on the national accounts data contained in the Extended Penn World Table database. We use linear trend, Augmented Dickey-Fuller (ADF) tests, and allow for structural breaks and instabilities in the series. Our results suggest that profit rates in OECD economies exhibited a variety of patterns, including stochastic and deterministic trends, random walk, reversals, as well as stability. The secular decline (fluctuation around a falling deterministic trend) hypothesis is supported for Canada, Portugal and the USA, while secular rise is witnessed for Greece and Norway.
JEL Classification: B5, C22, P17
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| first_indexed | 2024-04-10T17:32:19Z |
| format | Article |
| id | doaj.art-5cd5fa2d017542bca7850ebe74b51eac |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:32:19Z |
| publishDate | 2017-07-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-5cd5fa2d017542bca7850ebe74b51eac2023-02-03T16:43:10ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432017-07-017028110.13133/2037-3643_70.281_1Profit rates in the developed capitalist economies: a time series investigationIvan D. Trofimov0Kolej Yayasan Saad (KYS) – KYS Business School, Melaka 75450, Malaysia. This paper examines whether there is empirical evidence to support the hypothesis of a secular decline in the economy-wide profit rates, as predicted by classical economic theories. We specifically consider profit rates in the OECD economies based on the national accounts data contained in the Extended Penn World Table database. We use linear trend, Augmented Dickey-Fuller (ADF) tests, and allow for structural breaks and instabilities in the series. Our results suggest that profit rates in OECD economies exhibited a variety of patterns, including stochastic and deterministic trends, random walk, reversals, as well as stability. The secular decline (fluctuation around a falling deterministic trend) hypothesis is supported for Canada, Portugal and the USA, while secular rise is witnessed for Greece and Norway. JEL Classification: B5, C22, P17 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/13907Profit rateautoregressive modelstructural breakstrend |
| spellingShingle | Ivan D. Trofimov Profit rates in the developed capitalist economies: a time series investigation PSL Quarterly Review Profit rate autoregressive model structural breaks trend |
| title | Profit rates in the developed capitalist economies: a time series investigation |
| title_full | Profit rates in the developed capitalist economies: a time series investigation |
| title_fullStr | Profit rates in the developed capitalist economies: a time series investigation |
| title_full_unstemmed | Profit rates in the developed capitalist economies: a time series investigation |
| title_short | Profit rates in the developed capitalist economies: a time series investigation |
| title_sort | profit rates in the developed capitalist economies a time series investigation |
| topic | Profit rate autoregressive model structural breaks trend |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/13907 |
| work_keys_str_mv | AT ivandtrofimov profitratesinthedevelopedcapitalisteconomiesatimeseriesinvestigation |