Jim,
I didn't mean to say the rapid payback causes high profits, but rather than
high profits mean that companies will expect rapid payback.
Jim Devine wrote:
> I don't think the profit rate was high in 1998 because of rapid payback,
> but because wages were low relative to productivity (high rate of
> surplus-value) and because the output/capital ratio was high. If we're
> talking about the after-tax rate, then the tax system has helped boost
> profit rates.
>
> If the aggregate average profit rate is high, that means high cash flow
> relative to invested capital and thus more deposits by companies into the
> financial system. It also encourages optimistic expectations about future
> profitability. This suggests that all else equal, if the realized rate of
> profit rises for the economy as a whole, so does the rate of investment in
> new projects.
>
> Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~jdevine
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
