Comparative Growth Dynamics in a Discrete-time Marxian Circuit of Capital Model

Deepankar Basu
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Deepankar Basu: Department of Economics, University of Massachusetts, Amherst, MA, USA

Review of Radical Political Economics, 2014, vol. 46, issue 2, 162-183

Abstract: In this paper, a discrete-time version of the Marxian circuit of capital model in Foley (1982, 1986a) is used to address two important theoretical issues of general interest to the heterodox economics tradition: profit-led versus wage-led growth, and the growth-reducing impact of non-production credit. First, it is demonstrated that both profit-led and wage-led growth regimes can be accommodated within the Marxian circuit of capital model. Second, it is demonstrated that, if the total flow of credit is large, the steady-state growth rate of a capitalist economy is negatively related to the share of consumption credit in total net credit.

Keywords: circuit of capital; economic growth; consumption credit; Marxian political economy (search for similar items in EconPapers)
JEL-codes: B51 O1 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:46:y:2014:i:2:p:162-183

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