On Fri, 25 Jan 2002, Charles Brown wrote:
> the profit rate & recession > by Fred B. Moseley > > > -clip- > The main point of disagreement seems to be - whether or not the decline of > investment spending that caused the recession was itself caused by the > decline in the rate of profit since 1997. I argue yes and you argue > no. You argue that business investment decisions are not determined by > short-run cyclical fluctuations in the rate of profit, but are instead > determined by the long-run trend in the rate of profit, and also by the > capacity utilization rate. > > ^^^^^^^^ > > CB: Fred, Hope your child is better. He is, thank you, but then I got it! An awful flu eminating from school and circulating through families. > What if the decline in the rate of profit is due to failure to realize > through sale of commodities, failure to complete fully the C-M' phase > of M-C-M' ? The rate of profit declined from 1997 to 2000, and during this time the US economy was booming and there was no "realization problem". This decline in the rate of profit is what caused the decline in investment spending, which in turn caused the recession. Since the recession began, there has been a "realization problem", which has further reduced the rate of profit. But this further decline in the rate of profit due to "realization problems" was an effect of the recession, not a cause. Charles, does this make sense to you? Thanks, Fred
