Falling Rate of Profit, Non-production Activities and Stagnation in Eleven European Economies and the USA

Ozan Mutlu and Lefteris Tsoulfidis ()

International Journal of Political Economy, 2025, vol. 54, issue 2, 245-267

Abstract: This study develops empirical measures of key Classical and Marxian political economy categories by distinguishing between production and non-production activities and labor in eleven European economies and the USA. These estimates provide insight into the underlying causes of the 2008–2009 financial crisis and the subsequent period of weak economic growth. We argue that these economies have reached a critical juncture, where the stagnation of real net profit—due to the falling rate of profit—has discouraged net investment and increased unemployment pressure. Furthermore, recent movements in the profit rate may be linked to a reduction in the share of non-production labor and activities, potentially explaining the partial recovery in profitability.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:mes:ijpoec:v:54:y:2025:i:2:p:245-267

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DOI: 10.1080/08911916.2025.2522616

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