A test of “turbulent arbitrage”

Eric Kemp-Benedict ()

No PKWP2313, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: Anwar Shaikh's theory of turbulent arbitrage predicts that incremental profit rates will tend to equalize across sectors, albeit in a noisy and turbulent fashion. He supports the claim with plots of time series of average and incremental profit rates for US sectors. This paper applies a Kolmogorov-Smirnov two-sided test to pairs of sectoral profit rate time series, drawing on Shaikh's data. The results support Shaikh's claim.

Keywords: turbulent arbitrage; real competition; profit rates; Kolmogorov-Smirnov test (search for similar items in EconPapers)
JEL-codes: C14 E12 E22 (search for similar items in EconPapers)
Pages: 23
Date: 2023-09
New Economics Papers: this item is included in nep-hme and nep-pke
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