Rates of Profit: Recent Estimates

[Paul_A]

There is a 'must-see' article in URPE's RRPE, Fall issue (latest?) by Dumenil and Levy.  The most salient point is that they see a LONG RUN upturn in the rate of profit since 1982 which was the bottom of a 34 year decline.  So far, as of 2000, there has only been a partial recovery (since 1982 profit rates have returned roughly to the 1965 level).  This is long wave analysis, so of course there are ups and downs within these trends.  They see changes in "productivity" (technical change) as driving much of the downswing and now the upswing, but there are also shifts in the share of profits.  So, between the lines, they would seem to point to falling rate of profit theory although the article is deliberately limited to "the stylized facts".  They consciously draw on Shaikh, Tonak and Moseley.

To bring out the trends D & L rely on removing from consideration very capital intensive industries such as power, communications and transport on the grounds they are a special case.  They also use 1956-65 as the base years.

Of course the implications are central: are we well into a long upswing in profit rates that, very broadly speaking, might last for another 15 years or so?  I would love to hear what people think of the article (especially Fred Moseley and Jim Devine).  Is the difference in emphasis with Moseley largely because they now bring more recent data into play?

I recall that the paper was to be presented at the ASSA LAST year.  Does anyone know how the discussion went?

Paul A.

P.S.  Who are these French fellows Dumenil and Levy?   They seem to be quite prolific.




At 03:41 PM 1/9/2003 -0800, you wrote:

[was: RE: [PEN-L:33695] Re: Re: quesion from Michael Yates]

> Fred B. Moseley wrote:
> >You might want to take a look at my 1992 book *The Falling Rate of Profit
> >in the Postwar US Economy*, and a more recent 1997 RRPE paper "The Rate of
> >Profit and the Future of Capitalism."

Doug writes: 
> So where's the ROP these days?

according to the SURVEY OF CURRENT BUSINESS (http://www.bea.doc.gov/bea/ARTICLES/2002/09September/0902CorpProfit.pdf), what Fred calls the "conventional rate of profit" for the non-financial corporate sector has fallen pretty drastically in recent years. Its cyclical peak was in 1997, suggesting that the 2001 recession was partly -- or maybe completely? -- caused by the fall. I presume that the ROP fell more drastically in 2002 because of falling rates of capacity utilization (and profit realization) as it did in 2001, though the government hasn't calculated that yet.

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Jim Devine [EMAIL PROTECTED] &  http://bellarmine.lmu.edu/~jdevine