Why Does Profitability Matter? Profitability and Stability in the U.S. Economy since the 1950s

Gerard Duménil and Dominique Lévy
Additional contact information
Gerard Duménil: CNRS, LAREA-CEDRA, University of Paris X-Nanterre
Dominique Lévy: CNRS, CEPREMAP

Review of Radical Political Economics, 1993, vol. 25, issue 1, 27-61

Abstract: This study empirically reveals a direct link between profitability and stability. To make the demonstration, we develop and then estimate a short-run dynamic disequilibrium model of a capitalist economy, with money, in which agents react to the observation of disequilibria. The condition for the stability of the general level of activity is expressed as a function of the reactions of economic agents. An increased reaction by quantities to disequilibria between supply and demand, on the part of firms, jeopardizes stability. It is demonstrated empirically that the variations of the profit rate influence this degree of reaction and, therefore, impact on stability.

Date: 1993
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/048661349302500102 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:25:y:1993:i:1:p:27-61

DOI: 10.1177/048661349302500102

Access Statistics for this article

More articles in Review of Radical Political Economics from Union for Radical Political Economics
Bibliographic data for series maintained by SAGE Publications ().