Profit Squeeze and Keynesian Theory

Stephen A. Marglin and Amit Bhaduri

No wp-1988-039, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This chapter explores one aspect of the relationship between the system of production and the macroeconomic structure, namely, the role of profitability in determining investment demand and the level of economic activity. Within the system of production, wages are a cost: the lower are profits per unit of production, the lower the stimulus to investment. In a Keynesian view of the macroeconomic structure, however, wages are a source of demand, hence a stimulus to profits and investment.

Keywords: Keynesian economics; Macroeconomics; Production (Economic theory); Supply and demand; Wages (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (6)

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