Cyclical Over-Investment and Crisis in a Labor-Scarce Economy

This file is part of IDEAS, which uses RePEc data

Cyclical Over-Investment and Crisis in a Labor-Scarce Economy

Author Info

James N. Devine

Abstract

This paper incorporates a post-Marxian view of investment in an overinvestment theory of cyclical economic crises. The Marxian crisis theory based on the tendency for the profit rate to fall (because of overmechanization) is replaced with a theory of overaccumulation of fixed capital, while the high employment profit squeeze is restated in terms of this overinvestment. Historical conditions determine overinvestment's results: when labor power is potentially scarce (precapitalist or agricultural labor reserves are largely gone), overinvestment means rising costs, falling profit rates, and crisis. Also, the resulting slump can cause either a recovery or lasting stagnation. Finally, post-1949 U.S. data are presented to argue the theory's plausibility.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 13 (1987)
Issue (Month): 3 (Jul-Sep)
Pages: 271-280
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eej:eeconj:v:13:y:1987:i:3:p:271-280

Contact details of provider:
Postal: c/o Iona College, 715 North Avenue, New Rochelle, New York 10801-1890 USA
Phone: (914) 633-2088
Fax: (914) 633-2549
Email:
Web page: http://www.iona.edu/eea/
More information through EDIRC

Order Information:
Postal: Dr. Mary H. Lesser, Department of Economics, Iona College, New Rochelle, NY 10801-1890
Email:
Web: http://www.iona.edu/eea/publications/subandmem.htm

For technical questions regarding this item, or to correct its listing, contact: (Victor Matheson, College of the Holy Cross).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Albert M. Wojnilower, 1980. "The Central Role of Credit Crunches in Recent Financial History," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(1980-2), pages 277-340. [Downloadable!]
Shaikh, Anwar, 1978. "Political Economy and Capitalism: Notes on Dobb's Theory of Crisis," Cambridge Journal of Economics, Oxford University Press, vol. 2(2), pages 233-51, June.
Roemer, John E, 1978. "The Effect of Technological Change on the Real Wage and Marx's Falling Rate of Profit," Australian Economic Papers, Blackwell Publishing, vol. 17(30), pages 152-66, June.
Kahn, Lawrence M, 1980. "Bargaining Power, Search Theory and the Phillips Curve," Cambridge Journal of Economics, Oxford University Press, vol. 4(3), pages 233-44, September.
Abel, Andrew B, 1981. "A Dynamic Model of Investment and Capacity Utilization," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 379-403, August. [Downloadable!] (restricted)
Hahnel, Robin & Sherman, Howard, 1982. "The Rate of Profit over the Business Cycle," Cambridge Journal of Economics, Oxford University Press, vol. 6(2), pages 185-94, June.

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Rudy Fichtenbaum, 1988. "'Business Cycles,' Turnover and the Rate of Profit: An Empirical Test of Marxian Crisis Theory," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 221-228, Jul-Sep. [Downloadable!]

Statistics

Access and download statistics

Did you know? The RePEc project started in 1997. Its precursor, NetEc, dates back to 1993.

This page was last updated on 2009-12-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.