The investment-profit nexus in an era of financialisation and globalisation. A profit-centred perspective

Cédric Durand and Maxime Gueuder

No PKWP1614, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: During the past decades, the link between profits and domestic investment has weakened in the biggest high-income economies. The present contribution explores this relaxation of the profits-investment nexus through a profit-centred perspective. Focusing on the impact of the origins and uses of profits, we study the investment behaviour of non-financial corporations in relation to their profits at the macro level since 1980, a period marked by financialisation and globalisation. We contrast three competing hypotheses – the Revenge of the Rentiers, the Financial Turn of Accumulation and Globalisation – and test them through a macro panel data analysis for France, Germany, Italy, Japan, the United Kingdom and the United States over the period 1980-2012.

Keywords: profits; investment; financialisation; globalisation; macro panel analysis (search for similar items in EconPapers)
JEL-codes: E22 F62 G35 (search for similar items in EconPapers)
Pages: 33
Date: 2016-07
New Economics Papers: this item is included in nep-ger, nep-hme and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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