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VERTICALLY INTEGRATED MEASURES OF THE RATE OF PROFIT IN THE UNITED STATES 1950–90
Author(s) -
Miller Jack L.,
Gowdy John
Publication year - 1998
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1998.tb00298.x
Subject(s) - economics , rate of profit , profit rate , profit (economics) , stock (firearms) , monetary economics , labour economics , macroeconomics , microeconomics , mechanical engineering , engineering
This paper investigates the importance of increases in the productivity of producing capital in estimates of the profit rate decline which occurred in the United States during the period 1950–90. We find that, when profit rate measures take into account the increasing productivity of producing capital stock (as measured by the embodied labor required to produce it), the observed decline is about one‐half that found using conventional measures of profit. This finding has important implications for interest rate and investment policies.